Beyond Meat share price: Investors remain bearish heading into Q4 earnings

• Beyond Meat commended by Bill Gates for its green efforts
• 2020's Q4 and full-year earnings due tomorrow
• Analysts remain mixed on the stock, assigning it a Hold rating on average
• Trade Beyond Meat’s earnings using spread bets or CFDs. Open an account today

Beyond Meat (BYND) is set to release their fourth quarter and full-year (FY20) earnings on Thursday 25 February – after the market close.

As a leader in the production and distribution of plant-based meats, Beyond Meat has captured the imagination of consumers and philanthropists worldwide for tackling four global issues – human health, animal welfare, climate change and overuse of natural resources.

Last week, global philanthropist Bill Gates praised Beyond Meat and other plant-based meat brands for their ‘quality road map and a cost road map, that makes them totally competitive’. Despite such glowing comments, Beyond Meat shares fell 5.8% on the day of Gates’ interview and analysts expect the company to remain loss making in the upcoming quarter/ year.

Indeed, as it stands, analysts anticipate the company to report earnings per share (EPS) of negative US$0.14 for the fourth quarter and negative US$0.41 for the full-year, according to MarketWatch.

Moreover, with net revenues rising just 2.7% on a year-over-year basis, investors will likely be keen to see that top-line trend improve significantly as part of tomorrow’s earnings release.

Beyond Meat share price: The analyst take

While Beyond Meat has expansive ambitions, analysts appear uncertain on the stock’s outlook, assigning it a Hold rating on average. A number of high profile investment banks have also scaled back their price targets on the stock before the Q4.

JP Morgan Chase & Co. dropped their target price from US$95.00 to US$94.00 while reiterating their Underweight rating. Sanford C. Bernstein opted to give Beyond Meat shares a 'sell' rating, cutting their price target on the stock to US$89.00 per share.

Zacks Investment Research downgraded BYND’s rating from 'hold' to 'sell', while Piper Sandler also downgraded BYND from 'overweight' to 'neutral'.

A busy month before the Q4

Interestingly, this string of downgrades come after the stock rallied hard in January – surging 64% between 11-27 January. And while the stock has pulled back from the highs it recorded in January, BYND remains up over 20% YTD, last trading at US$152 per share.

Potentially explaining last month’s rally, Beyond released a number of interesting market announcements, including detailing a promotion to offer free plant-based breakfasts across major US cities, while also revealing plans behind a new corporate headquarters 'aimed at fuelling accelerated innovation.'

Maybe most importantly, on 26 January, the company announced a partnership with food, snack and beverages giant PepsiCo, which will see the companies work together to develop a suite of new plant-based products. Leveraging PepsiCo’s global capabilities, the company said the aim of the joint venture was to ‘develop, produce and market innovative snack and beverage products made from plant-based protein.’

Besides these market updates, the price rally we saw in January may be attributable to a short squeeze. On January 26, some 24% of Beyond’s stock was sold short; that, coupled with the PepsiCo announcement, may very well explain the elevated levels of share price volatility we have seen in the stock in recent times.

As we head into the Q4, investors continue to bet against Beyond Meat, with ~20% of the float sold short, according to MarketBeat.

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