Beyond Meat stock tumbles 17% as analysts worry about the company’s long-term growth

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  • Beyond Meat stock fell 17% in premarket trading as analysts shared their doubts about the company’s future growth.
  • The company’s third-quarter results disappointed investors, and a weak forecast for fourth-quarter sales didn’t assuage concerns.
  • Credit Suisse analyst Robert Moscow wrote in a note that Beyond could hit the market faster than expected.

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Beyond Meat stock fell 17% in premarket trading on Thursday as Wall Street cast doubts on the company’s growth prospects.

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The plant-based meat maker reported disappointing third-quarter results after the bell on Wednesday. Its losses were higher than expected, while revenues were lower than expected even after the company’s warning last month. Beyond also issued a gloomy outlook indicating that the sell-off would not return immediately.

Jefferies called it “the quarter that probably broke the camel’s back.” Bernstein analyst Alexia Howard downgraded the stock, telling investors not to buy the dip.

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Credit Suisse analyst Robert Moscow wrote in a note, “We view the results as further evidence that Beyond’s business is reaching market saturation faster than expected and that the company has deeper problems that will not be easy to fix. “

Beyond attributed its weak quarter to a number of factors, including severe weather, Delta Edition and the restaurant’s labor challenges. CEO Ethan Brown told investors the problems were largely short-lived.

However, analysts are more skeptical. JP Morgan’s Ken Goldman quoted Maple Leaf Foods CEO Michael McCain, who told investors last week that the company is seeing a “marked slowdown” in the plant-based protein category, a change from the higher growth rates expected by the industry. can suggest.

“We’re not yet sure which is right — Beyond Meat or Maple Leaf Foods — but when we hear comments like this, it’s hard to be completely confident about the future of the category,” Goldman wrote.

Brown also said on Wednesday evening that he is optimistic about 2022. But the company hasn’t convinced analysts that this is true. Bank of America Securities analyst Brian Spillane wrote in a note that next year’s results will depend on the launch of McDonald’s McPlant Burger and its partnerships with other national chains such as Yum Brands’ Pizza Hut. McDonald’s is currently operationally testing McPlant in a handful of US restaurants and has begun selling the burger in some international markets.

Spillane also said there is concern that demand for US testing and meat alternatives has slowed, especially in grocery stores.

Jefferies analyst Rob Dickerson predicted that the stock would remain under pressure until a better understanding of plant-based meat’s long-term growth, consumption rates and competitive landscape. Shares of Beyond are down 38% this year, including Thursday’s drop, giving its market cap of $4.88 billion.

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