Bank Of America Raises Beyond Meat Price Target Following Secondary Offering

Beyond Meat Inc BYND has had a rough week after the company’s earnings report and secondary offer price disappointed the market. However, one analyst said Friday the company and its stock will be just fine in the longer-term.

The Analyst

Bank of America analyst Bryan Spillane reiterated his Hold rating for Beyond Meat and raised his price target from $170 to $182.

The Thesis

On Monday, Beyond Meat announced along with its earnings report that it would be completing a 3.25 million-share secondary equity offering that was ultimately priced at $160 per share, roughly 30% below the stock’s trading highs last week.

Spillane said the roughly $40 million Beyond Meat raised in the secondary offering will be used toward increasing production and supply capabilities and marketing/promoting its products.

Spillane said Beyond Meat exceeded his revenue, earnings and margin expectations in the quarter. He also said even Beyond’s updated guidance may still prove conservative given the number of companies that are currently testing or considering its products.

Bank of America raised its fiscal 2019 revenue estimates from $242 million to $263 million. Despite the impressive growth projections, given the potential for competition and the stock’s 600% premium to its IPO price just three months ago, Spillane says Beyond Meat shares may be fully valued at this point.

“BYND is positioned well to disrupt the US meat industry but see risk as more companies ramp up,” he wrote in a note.

Price Action

Beyond Meat shares traded higher by 1.4% to $178.63 on Friday morning but are down 20% overall in the past week.

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