Beyond Meat (BYND) Stock Is Working To Recover

Beyond Meat BYND Stock News

Beyond Meat Inc (NASDAQ: BYND) climbed more than 10% Wednesday morning. However, considering the more than 25% decline seen Tuesday that was fueled by analysts taking a more bearish stance on the stock, the gains may be suprirising.

Nonetheless, it seems as though the bearish analyst opinions are taking the back seat while the company’s news surrounding a new coffee chain carrying its products takes center stage. Here’s what’s going on:

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The Analyst Downgrade That Fueled Recent BYND Stock Declines

On Tuesday, news broke that JPMorgan Chase & Co. was taking a more bearish stance on the stock. The move led to a more than 25% decline, causing what proved to be the worst day for Beyond Meat since its IPO and putting a stop to the more than 500% rally that we’ve seen on the stock since.

In a note, Ken Goldman, a JPMorgan Chase & Co. analyst, reduced the rating on the stock from overweight to neutral. In the note, Goldman pointed to the fact that due to the strong gains that BYND has seen since its IPO, it is trading at 27 times estimated 2020 sales.

Let’s not forget, the company’s value climbed to around $10 billion since its IPO. A big part of the concern had to do with a frenzy on the stock that happened late last week, increasing the price of the stock by 69% from the close of Thursday, through Monday.

Beyond Meat Works To Recover

Although the bearish note from JPMorgan & Chase led to tremendous declines in value on Tuesday, on Wednesday morning, the stock started to rise yet again. The gains seem to be related to news that BYND has entered into an agreement that will put its products in 4,000 new locations across Canada.

The company entered into an agreement with a Canadian Coffee chain branded as Tim Hortons. The coffee chain said that it is now offering faux-meat breakfast sandwhiches that are made with Beyond Meat products.

The news seems to have offset the declines that we’ve seen from analyst opinions, including one opinion that was given Wednesday Morning.

In fact, Sanford Bernstein lowered their rating on the stock, dropping it from outperform to market perform. Once again, a big concern among the analysts at Sanford Bernstein revolves around the valuation of BYND.

Ultimately, Alexia Howard, analyst at Sanford Bernstein, believes that the highly volatile nature of the stock that we’ve seen since the IPO due to a limited float, has led to a valuation that is unreasonable.

Howard also pointed to the fact that the stock is now trading at 31 times what it believes to be enterprise value to sales relative to its potential sales. The analyst believes that this means that there is limited upside potential at the moment.

Investors Are Still Interested

Analysts aren’t always right, and the masses seem to be betting that in this case, they will be wrong. While the stock did decline with the JPMorgan downgrade, many have seen that decline as an opportunity to get in on the frenzy.

With the stock down, a relatively small public float, and good news released surrounding Tim Hortons adopting the company’s products, the stock is working toward a recovery today. So, what’s driving the interest?

The truth of the matter is the word vegan is a hot topic today. As millennials continue to pay attention to the food they eat, we’re seeing a strong shift among consumers who are moving away from meat and animal biproducts to vegan menu options. In fact, the shift is so strong that some are calling 2019 the year of the vegan!

While there are other vegan options out there, there are none that are quite as well-known and well-liked by the vegan community as Beyond Meat. As the shift continues to vegan lifestyles, BYND is going to be a prime beneficiary, and investors seem to be focusing on that, rather than analyst opinions with regard to valuation.

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What Do You Think?

Where do you think BYND stock is headed moving forward? Join the discussion in the comments below!

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