Why Oppenheimer's Sidelined On Beyond Meat Ahead Of The Q2 Print

Beyond Meat Inc BYND is scheduled to report its second-quarter results on Tuesday, Aug. 4.

Although the company’s longer-term prospects are bright, the stock has appreciated by 66% year-to-date, versus the S&P 500’s flattish performance, according to Oppenheimer.

The Beyond Meat Analyst: Rupesh Parikh maintained a Neutral rating on Beyond Meat, citing valuation as the reason for remaining on the sidelines.

The Beyond Meat Thesis: Recent partnerships with leading chains like Starbucks Corporation SBUX, Yum! Brands, Inc. YUM and Dunkin Brands Group Inc DNKN have solidified Beyond Meat’s global growth potential, Parikh said in a Thursday note. (See his track record here.)

While these partnerships suggest “a strong longer-term runway for growth in foodservice,” the business is facing near-term headwinds, the analyst said.

"Breakfast-oriented customers" like Starbucks and Dunkin Brands — and the COVID-19 scenario — present challenges for food service growth in the near-term, he said. 

“Investors appear to be looking past these concerns, making it harder to pinpoint true underlying expectations into the earnings report.”

Referring to the grocery business, Parikh said Beyond Meat has already demonstrated success with several retailers and “continues to gain distribution.”

Oppenheimer raised its Beyond Meat earnings estimates for the second quarter from a loss of 7 cents per share to a loss of 3 cents per share.

For 2020 as a whole, the firm raised its EPS expectations from a loss of 5 cents per share to a profit of 12 cents per share.

BYND Price Action: Shares of Beyond Meat were trading down by 2.35% at $123.70 at last check. 

Related Links:

Unusual Options Activity Insight: Beyond Meat

Burger King Didn't Mislead Vegans, Vegetarians On 'Impossible Whopper,' Judge Rules

Photo courtesy of Beyond Meat.