By Dhirendra Tripathi
Investing.com – Beyond Meat (NASDAQ:BYND) stock traded 4.3% lower Monday after Piper Sandler cut its target by 42% to $29 with analyst Michael S. Lavery citing growing competitive intensity and pessimism around the U.S. McDonald’s (NYSE:MCD) partnership as reasons for his somber outlook.
Lavery earlier had a target of $50 for the stock with a ‘neutral’ rating, according to StreetInsider.
The analyst points out that Beyond Meat is still burning cash “with no clear path to positive EBITDA.”
The lowered target reflects lower estimates for 2022 and 2023 sales, in addition to the lowered EV/sales multiple to reflect the company’s growth, profitability, and balance sheet.
The analyst also shared key findings from Piper’s survey, which showed that 31% of respondents said they would try plant-based meat if it were cheaper than animal meat.
According to the analyst, the company remains committed to lowering prices below that of animal protein (despite current inflation) by 2024, which will likely drive prices down more than it will lift volumes.
Beyond Meat had reported disappointing fourth-quarter numbers in February. In the fourth quarter ended December 31, the company’s net loss more than tripled to over $80 million on revenue of about $101 million.
Sales to U.S. grocers, convenience stores, and other retailers declined by almost a fifth in the fourth quarter. The company attributed this to softer demand, fewer shipping days, increased discounting, and “to a lesser extent, loss of market share.” President and CEO Ethan Brown called it a “temporary disruption.”