Beyond Meat (NASDAQ: BYND) shares are down significantly in 2022, with demand for plant-based meat products taking a hit since its highs a year or more ago, but one analyst thinks there is further pain ahead for all protein companies.
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Barclays analyst Benjamin Theurer downgraded Beyond Meat to Underweight from Equal Weight, lowering his price target on the stock to $10 from $13 per share.
The analyst told investors in a research memo that protein businesses face a difficult outlook, while the “worst is yet to come” for most of the sector, although he states that is not until 2024 or 20225 due to increasingly price-conscious consumers and rising beef prices.
Focusing on the plant-based meat industry specifically, the analyst added that Beyond Meat is dealing with deteriorating economics in alternative meat and that higher beef prices won't necessarily result in benefits for the industry.
Beyond Meat shares are down more than 80% in 2022 and over 82% in the last 12 months. Premarket Monday, the stock has risen/declined _%.
Meanwhile, last week, Goldman Sachs analyst Adam Samuelson cut the firm's price target on Beyond Meat to $5 from $14, maintaining a Sell rating on the stock.
Samuelson said in a research note that after “significant disruption” to the Beyond's pre-pandemic growth strategy from COVID-induced lockdowns, its “Pathway to Profitability” dilemma is now worsened by inflation, which is weighing down demand for higher-priced alternative protein.
The analyst added that Beyond Meat's supply chain capacity investments “have run against a sharp deceleration in underlying demand,” while he also believes the challenges facing Beyond Meat “remain significant” and that its pathway to achieving positive free cash flow in the second half of 2023 is a “narrow.”