Beyond Meat Stock Boosted By Bernstein Upgrade

A post-earnings volatility crush has made BYND options cheap

by Patrick Martin

Published on Nov 5, 2019 at 9:54 AM

When we last checked in with Beyond Meat Inc (NASDAQ:BYND), the faux meat concern was getting battered after a dismal corporate report. Today, BYND is on the mend, up 4.5% to trade at $83.39, after Bernstein hiked its rating to "outperform" from "market perform." In keeping its price target of $108 steady, the analyst in coverage said the upgrade was a "valuation call," and notes the importance in securing a partnership with McDonald's (MCD). 

Beyond Meat stock is now on track to snap a three-day losing streak. BYND was gashed by 22.2% on Oct. 29 after earnings, and has faced pressure from its 10-day moving average since late September. But perhaps today's rally was already in the cards, considering the equity's 14-day relative strength index (RSI) fell to 24 last night, firmly in oversold territory.

Despite sporting a 21% year-to-date lead, there's a lot of skepticism surrounding the stock. There are nine brokerages in coverage of BYND, and seven rate it a "hold" or "strong sell." Plus, 25% of the security's total available float is controlled by short sellers.

With earnings come and gone, a volatility crush means near-term options are attractively priced at the moment. The stock's Schaeffer's Volatility Index (SVI) of 58% sits in just the 6th percentile of its annual range, meaning now is an opportune time to speculate on BYND short-term trajectory with options.

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