Beyond Meat road to recovery ‘long and risky,’ says Mizuho

Mizuho analyst John Baumgartner says Beyond Meat’s EBITDA miss in Q3 was consistent with the negative preannouncement. One-time payables benefits drove temporary positive free cash flow, and new cost reductions are positive while additional savings likely exist, the analyst tells investors in a research note. However, the firm believes such initiatives are responses to precarious financials, given the company’s “sharp sales declines and limited progress in expanding consumption beyond early adopters.” Much heavy lifting remains to achieve sales growth, which is unlikely until mid-2024 at earliest, and cash burn returns in Q4, contends Mizuho. The firm sees a “long and risky” road to recovery for the company and keeps an Underperform rating on the shares with a $5 price target.