Game-Changing News For Beyond Meat
Beyond Meat (NASDAQ: BYND) investors got some game-changing news when Yum! Brands KFC announced it was going nationwide with its meatless chicken product. The launch comes after two years of...
Beyond Meat Is More Than Burgers
Beyond Meat (NASDAQ: BYND) investors got some game-changing news when Yum! Brands KFC announced it was going nationwide with its meatless chicken product. The launch comes after two years of testing and a successful string of test launches in 2020 and 2021. The product will be available for a limited time and, if successful at a national level, could be a staple of revenue for both KFC and Beyond Meat.
What this means for Beyond Meat, though, may not be what you think. The nationwide launch is nothing more than what was expected after so long a testing process so it will be the execution that counts. If Beyond Meat can prove to Yum! Brands that it can meet the demand we could see the company start picking up other major clients as well. And there is also the McPlant Burger to consider. That launch is underway in select markets right now.
The Analysts Were Underwhelmed By Beyond Meat’s News
The analysts are less than impressed with Beyond Meat at this point in the game. The consensus rating is only a weak Hold verging on sell and it has been souring over the past 30 and 90 days. The company has received several rating downgrades as well as a string of price target decreases that suggests sentiment is more bearish than the consensus is revealing.
The Marketbeat.com consensus estimate for the stock price, however, suggests about 40% of upside for the stock but this does not reflect the most recent activity very accurately. The consensus of the most recent commentary has the stock trading in a range of $55 to $75 with the lowest estimates having come out most recently.
Analyst Peter Galbo at Bank of America warns on a slowing rate of growth for the meatless category and uncertainty on the success of a full-scale McPlant rollout with McDonald's and associated gross margin dilution. He also notes that valuations have pulled in on growth/capacity concerns and a lack of profitability for the entire meatless category.
Institutions Sour On Beyond Meat, Short-Sellers Take Advantage
Institutional Interest in Beyond Meat remains high but the sentiment has soured over the past year. While institutional buying was net positive for three of the four calendar quarters of 2021 selling the 3rd quarter was heavy enough to offset it all and by a wide margin. Net institutional selling in Beyond Meat during 2021 totaled $1.03 billion dollars which is equal to 25% of the market cap with shares trading near $65. In our view, that is a telling indicator that Beyond Meat’s prospects for growth and profitability have changed.
As far as the short-sellers go, they have been having a field day with this stock and have driven it down to the lowest levels since the spring of 2020. Short-interest was, coming into January, above 36% so the shorts do mean business. The upshot, though, is that this stock is ripe for a short-covering rally and/or short-squeeze that could be monumental and all it would take would be some unexpectedly good news.
The Technical Outlook: Beyond Meat Is Overextended
Shares of Beyond Meat have been trending lower under the pressure of short-selling but that trend may end soon. The price action is making new lows but the indicators are wickedly divergent on both the daily and weekly charts indicating an oversold, overextended market ripe for reversal. We’re not going to try and call the bottom on this one but what we will do is say this; the bottom will reveal itself soon and when it does savvy traders and risk-on investors will be ready to grab some shares for the wild ride higher.