Shares in Beyond Meat (BYND) soared 22% after announcing a partnership with food distributor Sinodis to further expand the reach of its famous plant-based beef in China.
The news sent shares up 22% to $162.46 on Monday. The financial terms of the partnership weren’t disclosed.
Sinodis, a subsidiary of French group Savencia, is a distributor of imported food products to more than 4500 wholesalers, restaurant chains, and hotels in China.
“Our goal is to increase availability of plant-based meat globally, providing consumers with more choices, and access to nutritional and environmental benefits of plant-based meat,” said Beyond Meat’s chief growth officer Chuck Muth. “China has a large population and a strong interest in plant-based proteins.”
The partnership strengthens Beyond Meat’s foothold in China. Back in April, the plant-based meat provider made the foray into the market in China announcing a partnership with Starbucks (SBUX). At the end of last month, the company teamed up with fast-food chains Kentucky Fried Chicken (KFC) and Pizza Hut.
During May, Yum (YUM) China’s KFC also announced that it will begin its first Chinese trial of a plant-based version of its popular fried chicken. According to the company’s Weibo page, U.S. agribusiness Cargill Ltd will supply the nuggets.
Beyond Meat’s expansion plans have helped the value of its share price triple since mid-March 18. Following the impressive rally, the $85.78 average analyst price target now indicates 47% downside potential from current levels. (See Beyond Meat stock analysis on TipRanks)
However, one of the analysts still sees more gains in the offing for Beyond Meat’s stock. Five-star analyst Peter Saleh at BTIG on May 19 initiated the stock with a Buy rating and a $173 price target, suggesting that shares have room to advance an additional 6.5% over the coming year, citing strong sales growth in coming years.
“The company’s stated goal is to tackle the $1.4 trillion global meat industry,” Saleh wrote in a note to investors, adding that about $270 billion of that is spent in the U.S. “The adoption of Beyond’s products by mainstream customers in the suburbs will be the key to long-term success. We expect the company to expand into other protein categories including poultry to help broaden its appeal.”
The analyst forecasts sales to grow 56% in 2020 and 51% in 2021.
The rest of Wall Street analysts remain sidelined on Beyond Meat’s stock right now. The Hold analyst consensus is divided into 5 Hold and 5 Sell ratings versus 3 Buy ratings.