Analyst Can't Look Past Alarming BYND Headwinds

Beyond Meat's link to the struggling food-service industry is giving Citi pause

Deputy Editor
Jul 10, 2020 at 3:22 PM
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While buzzy faux meat producer Beyond Meat Inc (NASDAQ:BYND) has gained something of a cult following since going public a little over a year ago, the stock is starting to lose its luster for some. Citi initiated coverage of BYND this morning with a "sell" rating and a price target of $123, well below last night's close at $141.22. The broker said it was having a hard time looking past Beyond Meat's connection to the struggling food-service industry, and expressed concern over the plant-based meat market becoming flooded in the long-term. The warning was enough to convince traders -- BYND is down 3.8% at $135.90 this afternoon. 

Today's slump just adds to the downward-trending price action of the past several weeks, leaving BYND at a year-over-year deficit of 22.3%. There is no denying the equity saw an impressive rally off its mid-March lows, and still boasts a 79% lead for 2020, but resistance at the $160 level and further down the 20-day moving average could be cause for concern. 

The majority of analysts share Citi's sentiment. Coming into today, just three of the 15 in coverage called BYND a "stong buy," while seven said "hold," and five said "sell" or worse. Meanwhile, the consensus 12-month price target of $104.62 is a dramatic 22.7% discount to current levels. 

The stance in the options pits, however, is much more optimistic. In the past 10 weeks, 2.37 calls were picked up for every put at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This reading sits in the 95th percentile of its annual range, suggesting options players have rarely been more call-biased. 

 


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