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Beyond Meat Stocks Drop; Analyst Cites “Fading Growth Potential”

January 16, 2020


Jennifer Shike

Beyond Meat slumped as much as 9.4% in Wednesday trading after an analyst downgraded the stock for its fading growth potential in the U.S.


Bernstein Research analyst Alexia Howard said the plant-based-meat company’s sales growth potential could be “largely priced in at this point,” reports Markets Insider. The research firm noted the "less attractive" risk-return situation for the stock following an early January rally, and explained its "blue-sky scenario" includes an expanded U.S. partnership with McDonald’s.


The firm downgraded Beyond Meat to "market-perform" from "outperform" Wednesday. Bernstein maintained its target price of $106 per share, suggesting a 9% downside from Tuesday's closing price of $117.05, Markets Insider reports.


This marks the worst decline in Beyond Meat stock since Oct. 29, when it fell more than 20%. 


Growth abroad would significantly increase Beyond Meat’s available customer base and take attention away from the competitive U.S. market, the firm suggests. A move to China could take advantage of the protein supply shortage led by the African swine fever, Howard said in her note. 


Beyond Meat is just days off its best week since July, soaring 27% from Jan. 6 to Jan. 10, Markets Insider reports. 


The stock soared following a Jan. 7 Reuters report that Impossible Foods was giving up on attempts to land an agreement with McDonald’s, a story that Impossible Foods later disputed. On Jan. 8, Beyond Meat stock rose even more after McDonald's said it would bring its plant-based burger to more locations in Canada and expand tests on its PLT (plant, lettuce and tomato) burger that uses its plant-based patty, Business Insider reports.


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