Beyond Meat Inc. stock fell 21[ads1]% in Tuesday's trading with a few factors weighing in on the stock, including analyst feedback indicating that the Canadian PLT (plant, lettuce, tomato) lawsuit in McDonald's Corp. has not been met with a resounding response and the end of stock saving.
reported the first quarterly profit in the third quarter, raising its 2019 guidance to revenues in the range of $ 265 million to $ 275 million, from $ 240 million.
Read: Beyond Meat stocks fall despite revenue showing first gain in company history
At the conversation, CEO Ethan Brown talked about the food service partnerships Beyond Meat has entered into, especially those with Subway, the largest restaurant chain in the world by number of locations, KFC, a Yum Brands Inc.
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chain, Dunkin & # 39; Brands Inc.
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who just expanded the Beyond Breakfast Sausage sandwich to 9,000 locations, and McDonald's.
Brown also talked about McDonald's
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trial as the next step to reach a company goal.
"This important step reflects a dream come true," he said, according to a FactSet transcript of the earnings call. "We have long had the view of ubiquitous availability for Beyond Meat, and many years ago I set a goal that my own children should be able to go to big fast food chains and order Beyond within the time they could run."  He said that Beyond Meat is now available in 53 countries around the world.
However, as some analysts have already noted, just because McDonald's is trying Beyond Meat, it doesn't mean it'll end up on the menu.
See: Beyond Meat's stock soars after McDonald's unveils the test of company-made P.L.T. burgers
"A key question is whether McDonald's will partner with Beyond Meat in the United States," Bernstein analysts wrote in a note published Monday before the earnings were announced. They believe that a McDonald's partnership can add $ 168 million in fiscal 2019 and help increase sales to $ 867 million in tax 2021.
citizen, the first feedback has been largely positive, even whether it appears that the trial has not been a blowout success as far as justifying an immediate nationwide rollout in both Canada and the United States, "Bernstein said.
And: Beyond Meat initiated by sale as major competitors make gains in plant-based food
Seth Goldman, Beyond Meat's executive chair, also addressed the end of the lockup.
“While recognizing short-term reactions to these milestones is often marked by increased uncertainty. We believe that Beyond Meat is in a stronger position today than at any other time in its history, "he said during the interview.
" Our transition to a public company has positioned Beyond Meat well in order to capitalize on the significant growth opportunities that is ahead of us, and we thank our investors before the IPO for getting us to this point and for their long-term commitment and faith in our company. ”
Tyson Foods Inc., which feels these growth opportunities for its own companies.
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K, + 4.42%
and others have jumped into the plant-based meat category with their own brands.
"We do not interpret the interests and efforts of large corporations to capture our leadership position as proof that they will, more than Amazon's [ascent was] curl by traditional retailers who went into e-commerce to remove them," said Brown.
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"We continue to see Beyond Meat as perhaps the best growth story in staples," Jefferies wrote analysts. "Even with the recent withdrawal, Beyond & # 39; s valuation at ~ 15.5X earnings sets a high bar for the stock, especially with competition increasing, the top line momentum showing less upside versus loft expectations for the street and the IPO period expiring."  The Jefferies prices Beyond Meat shares hold, setting the price target at $ 115 from $ 190.
JPMorgan analysts also cut their price target, to $ 138 from $ 189, due to cuts in their revenue forecasts for 2025 and beyond. Analysts also question how many shareholders would like to sell their shares with the stock halved since the peak. The stock closed July 26 at $ 234.90.
"[P] that utilized the lockup expiration lately should eventually encourage some investors to start buying the stock again, even though the shares could turn out lower in advance," JPMorgan wrote.
JPMorgan ranks Beyond Meat stocks that are overweight.
Beyond Meat stock is down 61% over the last three months, while S&P 500 index
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has received 0.8% for the period.