Beyond Meat Inc.’s stock is on track for a record-setting day with a nearly 60% surge in premarket trading. Despite this impressive jump, Wall Street analysts are maintaining cautious opinions on the shares.
Mixed Views on Beyond Meat
Bernstein’s Alexia Howard highlighted that Beyond Meat would have had a negative-8.0% gross margin for the fiscal fourth quarter when excluding a non-cash charge, portraying an unimpressive picture. Although the company aims for mid- to high-teens gross margins by 2024, Howard remains skeptical about achieving this target, considering past performance discrepancies.
European vs. U.S. Market Trends
Howard emphasized that Beyond Meat’s products are gaining more traction in Europe due to heightened climate consciousness among consumers. However, she acknowledged the challenge of winning back disillusioned U.S. customers with new Beyond 4 products containing different ingredients.
Market Performance and Target Price
Howard’s market-perform rating and $9 target price reflect a cautious stance on the stock’s future trajectory. This indicates an uncertain outlook despite the current optimism surrounding Beyond Meat’s stock surge.
Beyond Meat Shifting Strategy Despite Concerns
Jon Andersen on Gross-Margin Outlook
William Blair analyst Jon Andersen acknowledges that Beyond Meat’s gross-margin outlook is changing due to anticipated price increases and restructuring efforts. These strategic moves are seen as necessary, though they have noticeably shifted the company’s narrative for the time being.
Limiting Growth Potential
However, Andersen also highlights concerns that this approach may limit Beyond Meat’s ability to invest in activities that could drive demand, such as enhancing the perception of plant-based meat benefits. According to Andersen, the path to sustained growth funded internally could take quarters, with an uncertain outcome.
Market Perform Rating
Andersen rates Beyond Meat’s stock as a “market perform”.
Robert Moskow’s Insights
TD Cowen’s Robert Moskow supports Beyond Meat’s shift towards raising prices, suggesting that focusing on a smaller consumer segment could be key to the company’s success. Despite this strategic move, Moskow remains cautious about the ongoing challenges in the plant-based meat industry.
Moskow voices concerns about Beyond Meat’s sales target for the year of $315 million to $345 million, deeming it overly ambitious. His estimate aligns with the lower end of this range, positioned at $315 million.
Underperform Rating
Moskow maintains an “underperform” rating on Beyond Meat’s stock, accompanied by a decreased price target of $10 from $15 in his recent note to clients.
Analysts’ Consensus
Out of 15 analysts monitoring Beyond Meat’s stock, FactSet reveals that seven suggest holding positions, while eight advise selling. Collectively, their average target price stands at $6.80.