Beyond Meat on Tuesday announced plans to build 2 production facilities near Shanghai as the plant-based meat pioneer has earmarked China as one of its most important major markets in the years to come.
Shares are up 1.7% in Tuesday’s pre-market trading. Beyond Meat (BYND) said that its wholly-owned subsidiary Beyond Meat (Jiaxing) Food Co., has signed an agreement with Jiaxing Economic & Technological Development Zone (JXEDZ) to design and build facilities to manufacture plant-based meat products including beef, pork and chicken under its brand in China.
Beyond Meat said that it will be the first multinational company focused solely on plant-based meat production to bring its own major production facility into China. The facility is expected to begin trial production within months and reach full scale production in early 2021.
“China is one of the world’s largest markets for animal-based meat products, and potentially for plant-based meat,” said Beyond Meat CEO Ethan Brown. “We are delighted and confident that after several months of productive and collaborative discussions, we will partner with the JXEDZ to develop two production facilities, including one of the world’s largest and technologically advanced plant-based meat factories. We are very impressed by the capabilities and vision of the JXEDZ and they are the ideal partner for us in this vitally important country and market.”
Beyond Meat is entering new international markets and shifting sales to retail as the coronavirus pandemic is boosting the appetite for healthier eating, while outdoor dining options are limited and consumption in supermarkets is increasing. Starbucks (SBUX) announced today that it is adding new plant-based food items to its menus in select locations across Asia, which also include a variety of Beyond Meat products.
The company’s expansion deals have helped the value of BYND’s share price to more than double since mid-March. Following the impressive rally, the $129.80 average analyst price target now indicates more modest upside potential of about 3% from current levels.
Robert W. Baird analyst Ben Kallo this month initiated the stock with a Buy rating and a $160 price target (27% upside potential) as he believes in the future growth potential for alternative meat in general, adding that an “extremely large addressable market [is] one of the most compelling facets of [the] investment thesis”.
Kallo welcomed other players like Tyson Foods launching plant-based foods saying that “competition is a show-me story and could be beneficial for all parties,” and compared the alternative-protein industry to the electric-vehicle industry, which is also still a tiny portion of the overall total.
Kallo forecasts 2021 sales will reach $812 million, which is above the Street consensus of $738 million.
With shares up 67% year-to-date, the rest of the Street is sidelined on the stock. The Hold analyst consensus breaks down into 9 Holds and 5 Sells versus 3 Buys. (See Beyond Meat stock analysis on TipRanks).
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