Beyond Meat Lacks Sizzle: 3 Analysts Discuss Earnings Miss, 'Daunting' Recovery

Zinger Key Points
  • Beyond Meat’s outlook of positive free cash flows by the second half of 2023 seems aggressive, one analyst said.
  • The company faces a “litany of headwinds,” another analyst stated.

Beyond Meat Inc BYND recently reported a wider-than-expected loss on disappointing revenues for the third quarter. However, the stock recovered on earnings, following a surge in short interest.

Here are three analyst takes:

  • Mizuho Securities's John Baumgartner reiterated a Neutral rating, while reducing the price target from $27 to $11.
  • BMO Capital MarketsKenneth Zaslow maintained a Market Perform rating, while lowering the price target from $20 to $14.
  • Credit Suisse's Robert Moskow reaffirmed an Underperform rating and price target of $10.

Read on for more details.

Check out other analyst stock ratings.

Mizuho Securities

Beyond Meat reported its quarterly EBITDA short of Street expectations and the path to recovery seems “daunting,” Baumgartner said.

“Following 21 months of category retail volume declines (BYND share -800bps), priority on cost controls and cash generation is prudent,” the analyst wrote. "Still, positive FCF, targeted within 2H23, seems aggressive absent material revenue recovery and plans for mfg. capacity rationalization suggest it's unlikely."

BMO Capital Markets

“BYND’s F3Q22 underlying EPS of a loss of $1.60 fell far short of consensus loss of $1.15, as a double-digit volume and pricing declines coupled with cost de-leveraging led to lower-than-expected profit results across all segments,” Zaslow wrote in a note.

Beyond Meat faces “a significant secular and sustained pricing headwind,” the “lingering effects” of its “profit-dilutive growth strategy,” a tough retail environment and heightened competitive activity, he added.

Credit Suisse

“Conserving cash is the right path for a distressed business like this, but perhaps out of synch with the strengths of an entrepreneurial visionary CEO like Ethan Brown who build the company for growth,” Moskow said.

“Also, while management views its premium price points and the weak economy as the biggest barrier to consumer trial in the refrigerated side, we think consumers have balked at the taste, odor, and texture."

"Reducing prices to match commodity meat is unlikely to will generate enough volume to enable the company to achieve margin expansion, “especially in an environment of unprecedented cost inflation."

BYND Price Action: Shares of Beyond Meat had risen by 15.74% to $13.68 at the time of writing on Thursday.

Read Next: Beyond Meat Introduces Plant-Based Chicken Products

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Posted In: Analyst ColorEarningsNewsPrice TargetReiterationSmall CapTop StoriesAnalyst RatingsMoversTrading IdeasBMO Capital MarketsCredit SuisseJohn BaumgartnerKenneth ZaslowMizuho SecuritiesRobert Moskow
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