The share price of Beyond Meat (NASDAQ: BYND) is on the move again in a clear signal of renewed investor interest in the stock.
Beyond Meat was founded in 2009 to provide protein-based food products that can be an alternative to meat. The company has received very positive reviews for its products in the past and is still regarded as a benchmark investment for the growth in the non-meat protein foods industry.
The Beyond Meat share price has been in the doldrums recently. The stock hit a peak at 234.9 on NASDAQ back in July but lost momentum and value in the subsequent months. It has been relatively rangebound since then, trading in the area of 79/80 which makes it very cheap compared with the valuations it was achieving in the summer months.
Investor appetite for Beyond Meat stock picking up
We are, however, detecting more enthusiasm around the share as of Friday’s trading day in the US and think we are going to see some more price action when US markets open this week. The stock closed up at 97.90 at close of play in the US Friday evening.
The Armchair Trader has always liked Beyond Meat. The reviews of its products have been consistently positive. Our own team have tried it, and they like it.
The macro trends also support this stock: we foresee demand for non-meat substitutes only increasing over the new few years as more people in the developed world adopt vegan lifestyles. Concern over how beef farming is impacting the climate is also going to play a role.
Is there a McDonald’s deal in the pipeline?
Investors are very focused on the idea that Beyond Meat is going to be announcing some big distribution deals in the very near future, with the possibility of an agreement with McDonald’s on the cards. McDonald’s recently withdrew from talks with Impossible Foods, Beyond Meat’s privately held alternative meat rival, so hopes are there of something fairly large for Beyond Meat if the company can play its cards right at the negotiating table.
McDonald’s needs a solid response to the current vegan frenzy that is sweeping the developed world and is unlikely to show any signs of losing momentum as the Amazon burns. Beyond Meat could be the solution if they can get the formula right.
Each time Beyond Meat has issued earnings, the stock has bounced upwards, namely +40%, +12% and +22%. Earnings are set to be reported on 5 February. But that aside, the Los Angeles Times has reported that McDonald’s is currently testing the Beyond Meat core product range for the levels of protein it contains, an issue that led to the rejection of Impossible Foods.
Some investors are staying away from Beyond Meat, largely because they don’t think the whole alternative meat story has been bought into yet. Others are just worried about the volatility of the stock, which has seen it give up so much value since July.
We think Beyond Meat has considerable upside. FactSet has said that it expects Beyond Meat to report a 150% increase in fourth quarter revenue when it reports earnings. Full year earnings are expected to be up 216% for 2019, again according to FactSet forecasts.
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