Beyond Meat (BYND) shares jumped higher Monday after analysts at Barclays issued a 'double upgrade' on the plant-based food group, noting its potential in the U.S. market isn't begin reflected in its stock price.
Barclays analyst Benjamin Theurer lifted his rating on the stock by two notches, to "overweight", and boosted his price target on the stock by $10, to $80 a share, citing "more positives than negatives" in the U.S. consumer market for alternative meat products.
"While additional Covid variants could continue delaying a full-blown foodservice recovery, we do expect a gradual recovery will continue," Theurer said. "Moreover, Beyond Meat has been further positioning its products in this channel in the U.S. and in international markets through new partnerships."
Beyond Meat shares were marked 14.8% higher in early afternoon trading Monday to change hands at $64.91 each, a move that would still leave the stock nursing a six-month decline of around 47.5%.
Earlier this month, McDonald's (MCD) said it would expand the test market for Beyond Meat's plant-based burger starting in February, offering it at round 600 test locations in U.S.-based restaurants, mostly in and around San Francisco and Dallas
McDonald's began testing the McPlant in November, and analysts have said a broader expansion across its network of 13,500 domestic sites could boost Beyond Meat sales, particularly if it is accompanied by a marketing and advertising push from the world's biggest restaurant chain.
The move would follow Beyond Meat's recent marketing deals with PepsiCo (PEP) and YUM! Brands (YUM) which the group hopes will accelerate revenues following a disappointing third quarter, as well as its ongoing distribution partnership with Walmart (WMT), the world's biggest retailer.
Beyond Meat said in mid-November that current quarter sales would likely come in between $85 million and $110 million, well shy of the Refinitiv consensus of $132 million, as restaurants and grocery stores pare back orders amid softer consumer demand.
Labor, transportation and logistics issues linked to COVID-19, as well as a severe storm in Pennsylvania, clipped third quarter profits, too, with Beyond Meat reporting a wider-than-expected loss of 87 cents per share on sales of $106.4 million.
Short interest in the stock remains elevated, as well, with recent data from S3 Partners showing bets against the group totaling $1.34 billion, or 38.9% of the stock's outstanding float.
