Bernstein: Buy The Dip In Beyond Meat

Beyond Meat Inc's (NASDAQ: BYND) stock peaked at nearly $240 per share in the summer and investors should be buyers of the dip, according to Bernstein.

The Analyst

Bernstein analyst Alexia Howard upgraded Beyond Meat's stock from Market Perform to Outperform with an unchanged $106 price target.

The Thesis

Beyond Meat's recent selling momentum can be attributed to the IPO lock-up expiry period and could still see further volatility if more insiders or early investors sell the stock in the near-term, Howard wrote in a note. At current levels, however, the risk-reward profile "skews towards the upside" given its sales growth outlook.

First-hand checks with McDonald's Corp (NYSE: MCD) contacts in Ontario, Canada who sell the Beyond's "P.L.T." sandwich (Plant. Lettuce. Tomato.) has been "largely positive," the analyst said. The response falls short of a "blowout success," but if McDonald's introduces the P.L.T. product in the U.S. then Beyond Meat's sales could improve from $280 million in fiscal 2019 to around $910 million in fiscal 2021.

Price Action

Shares of Beyond Meat were trading higher by 3.7% Tuesday at $82.80.

Related Links:

Analysts Slice Beyond Meat Price Targets Ahead Of Share Lockup Expiration

Beyond Meat Analyst Sees More Downside Ahead

Photo courtesy of Beyond Meat.