Analyst believes an extended COVID-19 timeline could push out the recovery in Restaurant & Foodservice sales
Beyond Meat (BYND) is scheduled to report results of its fourth fiscal quarter after the market close on Thursday, February 25, with a conference call scheduled for 5:00 pm ET. What to watch for:
1. RALLY LOOKS 'OVERDONE': Earlier this month, DA Davidson analyst Brian Holland downgraded Beyond Meat to Underperform from Neutral with a price target of $135, up from $133. The analyst noted that the stock has run up 42% on news flow and short covering, but the rally looks "overdone." Holland added that his scanner shows "continued deceleration" implying risk to his Retail segment forecast, while an extended COVID-19 timeline could push out the recovery in Restaurant & Foodservice sales.
2. BEYOND, PEPSICO JOINT VENTURE: PepsiCo and Beyond Meat announced last month that they will form The PLANeT Partnership, a joint venture to develop, produce and market snack and beverage products made from plant-based protein. The joint venture will leverage Beyond Meat's technology in plant-based protein development and PepsiCo's marketing and commercial capabilities to create and scale new snack and beverage options, the companies said. Financial terms of the partnership were not disclosed. Joint venture operations will be managed through a newly created entity.
Commenting on the news, Oppenheimer analyst Rupesh Parikh told investors that he suspects the joint venture is unlikely to be impactful to Beyond results for "at least a few quarters," but called the deal "another attractive longer-term driver." Parikh sees "a tricky setup from here" given what are viewed as challenging fundamentals and increasing competition in its retail segment along with continued difficulties on the food-service side.
3. MCPLANT BURGER: Amid plans for a more extensive launch, McDonald's (MCD) has "quietly" begun rolling out its McPlant burger in Scandinavia, wrote Bloomberg's Leslie Patton back on February 1. The fast-food giant's introduction of the McPlant burger in Denmark and Sweden started in January. "McPlant, which McDonald's co-developed with Beyond Meat, is made from pea-based protein, according to McDonald's Danish and Swedish websites, revealing previously undisclosed details of the item's ingredients," the publication added.