It's the news that many Beyond Meat Inc BYND investors have been waiting for: the company has finally announced a partnership with McDonald's Corp MCD.
The Analyst
Stephens analyst Will Slabaugh maintained an Overweight rating on McDonald’s with a $230 price target.
Why It Matters
McDonalds has said it will test the Beyond Meat-based burger in 28 restaurants in southwestern Ontario beginning Sept. 30. It's known as the P.L.T. —plant, lettuce and tomato.
Beyond Meat shares surged on the news, but Slabaugh said he's not sold on the announcement and does not see McDonalds fully jumping on board with Beyond Meat in the near-term.
"This is McDonald’s first plant-based product, and it comes after Burger King launched its Impossible Whopper in August," the analyst said in a Thursday note. (See his track record here.)
Stephens views the entry into the plant-based market positively, but does not expect a "full-blown" alternative beef rollout at Golden Arches restaurants in the U.S. in the near term.
The reason why is largely tied to the supply chain, Slabaugh said.
"However, we view an alternative chicken product (nugget, tender, sandwich) in the U.S. as a more likely nation-wide launch in 2020/2021 in conjunction with its exclusive poultry provider, Tyson Foods, Inc. TSN, which we would view as more novel and a likely larger sales driver."
McDonald's shares were trading 0.28% higher at $213.20 in Friday's premarket session.
Related Links
Beyond Meat Won't Be Entering The Japanese Market Yet
Subway Partners With Beyond Meat To Trial Beyond Meatball Sub
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