Beyond Meat Rises as Analysts Lift Targets Due to Retail Boost

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UBS Group AG’s Steven Strycula noted the faux-meat maker’s U.S. retail sales surged 157% year-on-year, and joined analysts at Jefferies and Piper Sandler & Co. in lifting his price target for the stock.

Beyond Meat’s shares jumped 12% in pre-market trading to $112.30 a share, adding to a 32% year-to-date rise.

Here’s a summary of what analysts had to say:

Jefferies, Rob Dickerson

Rating hold, raises price target to $95 from $83

A 37% rise in retail sales was offset by a 29% sequential decline in foodservice division amid lockdowns. As a result revenue declined about 1% quarter-on-quarter.

Lowering prices via larger frozen product offerings combined with heavier promotions during grilling season should help take incremental share from the beef industry.

Piper Sandler, Michael Lavery

Rating neutral, raises price target to $95 from $72

Food services trends look better than expected, with quick-service restaurant sales down only modestly.

Raises 2020 revenue estimate 26%, 2021 by 29% on more modest foodservice declines, distribution gains in China, and steady retail sales growth.

UBS, Steven Strycula

Rating sell, price target raised to $75 from $73

Retail business was a bright spot with quarterly sales up 157% year-on-year.

However, notes restaurants are placing increased menu emphasis on value items and are hesitant to onboard new menu items.

First-quarter gross margin of 38.8% versus estimate of 31% reflects greater leverage than Street anticipated.

Berenberg, Donald McLee

Rating buy, price target $115

The sales beat was primarily driven by increased volumes in the retail channel due to stockpiling.

Also benefited from new products and international growth amid deals such as a Starbucks (NASDAQ:SBUX) partnership in Canada and China.Overall, restaurant difficulties to outweigh the success in retail. Restaurants accounted for about 50% of 2019 revenue.

©2020 Bloomberg L.P.

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