Plant-based meat product producer Beyond Meat (NASDAQ:BYND) notched slightly higher in premarket trading today, and built on that momentum going into this morning's session, gaining nearly 4% at one point. The news came after plans to augment the company's sales efforts in China were detailed and put in place. While financial analysts are still urging caution, cautious voices on Beyond Meat have been reduced in volume for much of the last two years.
Beyond Meat's Plan to Tackle the Chinese Market
The recent shift in Beyond Meat's marketing drove much of its gains so far, as the company opened up a new online store in China. The company turned to JD.com (NASDAQ:JD) for a platform, and Beyond Meat hopes that the new portal will open up new consumer markets in one of the biggest potential markets on the planet. With the new portal, Beyond Meat looks to target four major cities—including Shanghai and Beijing—but it plans further expansion to reach 300 cities in the region. The move comes despite the Chinese government cautioning customers about meat substitutes.
However, the move also comes as Chinese consumers increasingly purchase fresh foods via online sources. Fresh food sales are expected to clear 300 billion yuan—about $46.4 billion US—which is up 18% just from 2020. Plant-based meat substitutes, however, are not a high priority for those food shoppers; a Sina Weibo study found that just 14% of the 400 users surveyed were willing to try plant-based meat options.
The Chinese push is just the latest in a string of moves Beyond Meat recently staged in a bid to improve sales. Just last week, the company rolled out a line of meat-free chicken tenders that featured a combination of peas and fava beans to produce a product with 14 grams of protein per serving. By way of comparison, Eat This Much found that the breaded chicken tenders at Walmart's deli came with five grams of protein per serving. The new tenders have arrived in nearly 400 restaurants, though there is no word as yet when the tenders will hit grocery stores.
Additionally, certain Panda Express locations in Southern California and New York will feature a Beyond Meat alternative for its orange chicken. This is the first time an Asian concept restaurant will feature Beyond Meat products, reports note.
What Are Financial Analysts Saying About Beyond Meat Stock?
A look at the Beyond Meat stock forecast, as based on our latest research of financial analysts, suggests a cautious outlook is a good plan. However, the notes of caution have been receding; Beyond Meat is currently rated a consensus “hold”, and that's been the case since October 2019, when the consensus Beyond Meat stock analysis was upgraded from “sell”.
A year ago, Beyond Meat stock had four “buy” ratings, seven “hold” and nine “sell.” Six months ago, that shifted to five “buy” ratings, along with seven “hold” and seven “sell.” Today, we're at four “buy” ratings, eight “hold” and six “sell.” The slight decline in “buy” pressure simply reverted to year-ago levels, while “sell” pressure is in a clear if gradual decline. The stability of “hold” pressure in the analysis does suggest some caution in the pool.
Beyond Meat share price targets, meanwhile, occupy a fairly broad range. The current average target is $125.53, separated by a high of $190 and a low of $77. With Beyond Meat seen trading around $132 today, there is some downside potential involved.
Recent moves for Beyond Meat from analysts have not been largely positive. Eight analysts have been seen lowering their price targets on Beyond Meat this year. Some of these have been largely cosmetic downgrades, like Piper Sandler dropping its target from $125 to $120 or Jefferies going from $140 to $132. Others have been more substantial, like Canaccord Genuity dropping its target from $155 to $125.
Additionally, CFRA analyst Arun Sundaram took the company down from “buy” to “hold” last week, noting that the company was likely to face increasing costs of doing business thanks to growing labor, marketing, and shipping costs. While this hurt the short term prospects, Sundaram noted that Beyond Meat would likely be a presence in the plant-based meat market for some time to come thanks to “...well-executed R&D and marketing strategies.” The company also saw a surge in put options buying in trading yesterday that put some downward pressure on share prices.
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