Shares from the faux-meat maker Beyond Meat (PARND) have continued to fall steadily in recent months, now down a mile from its $ 234 and peaked in the summer of 2020. While the innovative $ 4.1 billion company has fallen , its price targets and analyst ratings have also fallen.
Since many analysts tend to have more buy scores than sell scores, extra diligence should be exercised whenever sell or hold scores trump buy. With just one buy note, there aren’t many believers in the story of Beyond Meat’s turnaround. The fall has been so painful for its shareholders, but could 2022 bring any kind of relief?
There isn’t much to get excited about entering the New Year. Still, the assessment is compelling to true believers in the company’s alternative meat products.
At 8.7 times sales, BYND stock isn’t cheap, but relative to its long-term growth potential, it can be a relative glimmer of value in an otherwise high stock market. For this reason, I am inclined to side with the only bull analyst on the name. I am bullish. (See the top analyst stocks on TipRanks)
Beyond Meat sinks deeper into the seemingly endless abyss
The analyst community has the right to be skeptical. The company posted disappointing numbers in the third quarter, along with somewhat mixed forecasts. Prospects for profitability look distant, which is not good given that rates are expected to rise significantly over the next few years.
Management now expects revenues to fall to a lower range than their consensus, pointing to supply chain issues and labor shortages induced by COVID.
Without a doubt, supply chain issues and workforce issues are not unique to Beyond Meat. Such headwinds linked to COVID-19 have held back many businesses over the past year. With a low bar set ahead of its entry into Q4, all eyes will be on Beyond Meat and its ability to effectively deal with ongoing headwinds.
For the third quarter, Beyond Meat posted a larger-than-expected loss per share of $ 0.87. This is the fifth quarter in a row that the company has fallen short of expectations in terms of net income. Indeed, the trend is no friend of Beyond Meat, and it might take a surprising pace to get the name out of its funk, as it feels pressure from all sides.
The massive sale of multiple high growth names with no profits added salt to Beyond Meat’s wounds. However, such a larger weakness is probably mostly built into the course of action here.
What could change beyond the meat stock in 2022?
Supply chains are expected to get back on track in the new year. With that, Beyond Meat and many other companies are likely to finally have a heavyweight lifted from their shoulders.
Additionally, Beyond Meat is a leader in its niche industry, and the company’s innovative capabilities should not be overlooked by investors. As more competitors may settle in, count on the company to continue improving its formula (to be healthier, tastier and more environmentally friendly) while expanding into new categories of meat.
R&D spending is expected to remain high, but with it will come the potential for a truly revolutionary product. A future version of Beyond Meat’s beef substitute could end up in the middle of burgers at more popular chain restaurants.
Request for McDonald’s (MCD) McPlant could pave the way for increased demand for Beyond Meat patties next year. In addition, the innovation in fake chicken could also open up new avenues for growth.
A lot of innovation takes place behind the scenes, even if it doesn’t seem like it. Taste tests of new products will be hit and miss, but from these assessments, it appears investors aren’t expecting much from Beyond’s product pipeline. This could mean that the chances of a surprise are high as the business faces ongoing operational challenges.
Finally, Beyond Meat is a powerful brand. It quickly became synonymous with alternative meat products. For this reason, it may have a wider rift than many realize, even as competitive pressures intensify in the latter half of the decade.
The Taking of Wall Street
When it comes to Wall Street, BYND stock is showing up as a moderate sell off. Out of 14 analyst notes, there is one buy recommendation, seven keep recommendations, and six sell recommendations.
Beyond Meat’s average price target is $ 78.83, which implies a potential upside of 21%. Analysts’ price targets range from a low of $ 54.00 per share to a high of $ 122.00 per share.
Disclosure: At the time of publication, Joey Frenette does not have a position in any of the titles mentioned in this article.
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