The shares of the El Segundo, Calif., plant-based-meat company have underperformed the S&P 500 since the investment firm initiated coverage at sell in July.
Citi also raised its price target on Beyond Meat to $141 a share from $123. Beyond Meat shares at last check were up 3% to $134.93.
Analyst Wendy Nicholson sees the company's new direct-to-consumer channel as a good source of growth. The company's lack of that option had been one of her initial concerns about the company.
Additionally, as the worst of the coronavirus pandemic may have passed, Nicholson said, she expects more food-service companies to add plant-based meat to their menus, leading to "incremental food-service business over time" for Beyond Meat around the globe.
Last Thursday, Beyond Meat said it would sell its products directly to consumers through a new e-commerce site, starting Thursday.
The website will give consumers access to “a vast portfolio of signature plant-based meats, including all-new bulk packs, mixed product bundles, limited-time offers, trial packs and more,” the company said in a statement.
All orders will be sent with two-day shipping, Beyond Meat said.
“According to the most recent 4-week Spins data ending July 12, Beyond Meat was the No. 1 selling brand in refrigerated plant-based meat,” the company said. Spins is a natural-products researcher.
Beyond Meat sells through 26,000 retail locations in the U.S. The company, which went public in May 2019, has capitalized on the burgeoning plant-based-meat industry.