In a report released today, John Baumgartner from Mizuho Securities maintained a Sell rating on Beyond Meat, with a price target of $1.50.
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John Baumgartner has given his Sell rating due to a combination of factors impacting Beyond Meat’s financial and market position. Despite addressing short-term liquidity issues through a term loan and a convertible notes exchange, the company has significantly diluted its equity, issuing 316 million new shares. This dilution, while reducing debt, aligns with Baumgartner’s bearish thesis on the company’s capital restructuring.
Additionally, the fundamentals of Beyond Meat and the broader meat alternatives category remain weak. The U.S. market for meat alternatives has been declining, with Beyond Meat’s sales dropping significantly. Despite efforts to reduce costs and improve EBITDA, the company faces challenges from consumer preferences shifting towards traditional meat, even at high prices. These factors contribute to Baumgartner’s cautious outlook and the decision to maintain a Sell rating with a reduced price target.
Baumgartner covers the Consumer Defensive sector, focusing on stocks such as Kraft Heinz, Beyond Meat, and The Hershey Company. According to TipRanks, Baumgartner has an average return of 7.8% and a 51.99% success rate on recommended stocks.
In another report released on October 10, TD Cowen also maintained a Sell rating on the stock with a $0.80 price target.