Beyond Meat Gets Double Downgrade at Barclays to Underweight

'Headwinds related to foods service channels being closed due to lockdowns' led to the action against Beyond Meat, Barclays said.
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Beyond Meat  (BYND) - Get Report shares fell in an up market Monday morning, after Barclays analyst Benjamin Theurer downgraded the plant-based meat seller to underweight from overweight.

Theurer's move was based on “near- to medium-term headwinds, mostly related to foodservice channels being closed due to lockdowns,” he wrote in a commentary cited by Bloomberg.

The restaurant/foodservice sector has accounted for most of Beyond Meat’s recent sales growth. In 2019, restaurant/foodservice made up about half of the company’s revenue.

As for the coronavirus pandemic, it led to restaurant closures that obviously hurt sales, and the “hit in this channel might be too high for the retail channel to fully offset,” Theurer said. He said the foodservice industry may not recover until next year.

Beyond Meat shares fell last week after McDonald's  (MCD) - Get Report confirmed that it had phased out its Beyond Meat burger trial in Canada.

Between Sept. 30 and April 6, McDonald's launched two consecutive trials of its P.L.T. (plant, lettuce and tomato) burger in dozens of restaurants in Ontario.

The trial was only scheduled for a 12-week run, a Beyond Meat spokesperson told TheStreet, “We can only comment generally and share that we were pleased with the test.”

The trial ended, however, without public comment from McDonald's, leaving fans of the burger wondering where the Beyond Meat patty had gone.

Two weeks ago, Beyond Meat unveiled a summer cut in retail prices for its burgers.

Beyond Meat shares recently traded at $134.00, down 5.42%. The stock has soared 114% in the last three months.

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