Beyond Meat Initiated Outperform at Baird on Growth Prospects

“We model substantial revenue growth over the next several years" at Beyond Meat, a Baird analyst said, initiating coverage at outperform.
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Beyond Meat  (BYND) - Get Report shares rose Thursday after Baird analyst Ben Kallo began coverage of the plant-based-meat seller with an outperform rating and a $160 share-price target.

“We model substantial revenue growth over the next several years, driven by increasing distribution (domestically and internationally), increasing velocity per point of distribution, and introduction of new products," he wrote in a commentary cited by MarketWatch.

"We are constructive on Beyond's growth prospects given the company's rapidly growing brand equity and large addressable market."

Shares of the El Segundo, Calif., company recently traded at $130.69, up 0.8%. They have soared 72% so far this year.

Beyond Meat’s products will increasingly take market share in the meat market, as the public continues to focus on health, wellness and sustainability, Kallo said, according to Bloomberg.

He said Beyond Meat would end 2020 with enough manufacturing capacity to support more than $1 billion in annual gross revenue, Bloomberg reports.

Beyond Meat should keep adding raw-material suppliers and might shift from primarily pea protein to include other protein sources, Kallo said. The company also might add more co-manufacturers and/or bring processes in-house.

Morningstar analyst Rebecca Scheuneman also sees some strength for the company, but she thinks its stock is way overvalued, putting fair value at $65.

“We’re still optimistic on the prospects for the meat-like plant-based-meat market, which provides a great option for omnivores seeking to consume more vegetables,” she wrote last month.

“We model Beyond’s market share increasing from 2.5% in 2019 to 6.8% in 2029, as plant-based meats gain a larger share of the overall meat category, and as Beyond’s brand continues to win with consumers, given its strong performance in taste tests and ongoing R&D investments.”