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Bank Of America On Beyond Meat: 'No Cattle' To The Investment Story

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Bank Of America On Beyond Meat: 'No Cattle' To The Investment Story

Beyond Meat Inc (NASDAQ: BYND) deserves credit for developing a meat alternative product that could perform well within the growing addressable market. The stock's 200 percent gains since its May 2 IPO implies there's "no cattle" to the investment story at current levels, according to Bank of America.

The Analyst

Bank of America's Bryan Spillane initiated coverage of Beyond Meat with a Neutral rating and $85 price target.

The Thesis

Plant-based products succeeded in gaining a 13 percent market share in the milk category and a similar disruption could occur within the beef category, Spillane wrote in a note. Assuming this plays out, Beyond Meat faces a potential $40 billion market within 10 years.

Spillane said first-hand checks into search trends, social media posts, scanner data and restaurant orders all suggest "strong interest" for plant-based meat. Beyond Meat has a unique advantage as it has already succeeded in building brand awareness, gained a portfolio of celebrity ambassadors and organic influencers to drive awareness.

Despite multiple positive developments, Beyond Meat faces several investment risks moving forward. These include:

  • Difficulty in addressing soaring demand from a service and quality perspective;
  • Prices are high versus traditional meat products;
  • Competition could "flood" the market; and
  • Commercialization of competing technologies like lab-grown meats.

Price Action

Shares of Beyond Meat were trading higher by more than 4.4 percent at $89.74 Wednesday morning.

Related Links:

What's The Beef? Analysts Initiate Coverage On Beyond Meat

Dan Nathan Sees Unusual Options Activity In Beyond Meat

Photo courtesy of Beyond Meat.

Latest Ratings for BYND

DateFirmActionFromTo
Aug 2019UpgradesNeutralOverweight
Aug 2019ReiteratesNeutral
Jun 2019DowngradesOutperformMarket Perform

View More Analyst Ratings for BYND
View the Latest Analyst Ratings

Posted-In: Bank of America Bryan Spillane food meatAnalyst Color Price Target Initiation Analyst Ratings Best of Benzinga

 

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