Downgraded Beyond Meat Stock Set for Worst Day Ever

BYND stock hit a record high on Monday

Jun 11, 2019 at 10:28 AM
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Beyond Meat Inc (NASDAQ:BYND) stock is spiraling today, down 18.9% at $136.33, pacing for its worst day ever by far. This comes after J.P. Morgan Securities downgraded the stock to "neutral" from "overweight," saying the vegan burger maker's risk/reward is now balanced, and calling the move "purely a valuation call." However, following the stock's race to record highs in recent sessions, the brokerage firm raised its BYND price target by $1 to $121.

Prior to today, analysts maintained two "strong buy" ratings on Beyond Meat, compared to three "hold" recommendations. Meanwhile, the average 12-month price target is docked at $100.83 -- a nearly 27% discount to current trading levels.

And while options traders have been targeting calls, short sellers have been ramping up their exposure -- possibly suggesting shorts have been using calls to hedge against more upside for BYND stock. The 3.89 million Beyond Meat shares controlled by shorts account for 7.2% of the stock's float.

These shorts have been feeling the heat during the food stock's surge up the charts since its early May trading debut. Since its May 2 open at $46 -- well above the company's initial public offering (IPO) price of $25 per share -- BYND has added 194%, and topped out at an all-time peak of $186.43 yesterday. As such, the equity's 14-day Relative Strength Index (RSI) closed last night at 83, well into overbought territory, suggesting a near-term retreat may have been in the cards.

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