Update: The Revolution of Meat Products (BYND)
Koki Mashita | May 22nd 2020
An Update on Beyond Meat (BYND)
Throughout the last couple of days, Beyond Meat (BYND) stock prices have skyrocketed. Why? One of the main reasons is BTIG analyst Peter Saleh’s target price of $173 per share on Tuesday - a target price that caused investors to pump prices up to $137.5 on Tuesday (an increase of almost 4.75%).
Why the increase?
As a result of the coronavirus pandemic, there has been a drastic decrease in meat production of any kind in the United States. Furthermore, as a consequence of so many American’s “doomsday” mindset, meat has flown off the shelves in magnitudes never seen before. Given this, we don’t think it’s any surprise that there is a nation-wide shortage of meat in the United States. This isn’t all bad news, though. Because Americans are now forced to consider alternative meat products, companies such as Beyond Meat or Impossible Foods have seen a drastic increase in sales - a factor that has greatly contributed to Beyond Meat’s stock success in recent weeks. Although Impossible Foods is not a publicly traded company, analysts hope that - as a result of widespread alternative meat consumption - it will eventually be able to launch as a public company. To top it off, Beyond Meat has been offered a potential partnership with Starbucks. Needless to say, Beyond Meat’s future is nothing but bright.
Although Beyond Meat has seen recent success in the market, there are still few risks we need to consider. Firstly, just because Beyond Meats is the most prominent alternative meat provider, does not mean that there are no competitors. Tyson Foods and Impossible Meats are direct competitors in the plant-based meat industry, and there is absolutely no doubt that they will continue to engineer, develop, and create competitive meat products. Also, there have been other companies branching out the meatless products such as chicken nuggets made with “innovative protein technologies” (NUGGS).
Should I buy?
Many investors and market analysts are concerned with the significant increase of Beyond Meat’s share price; most believe that it poses a great risk for long-term investment. However, because of the relatively high target pricing set by BTIG, we believe that Beyond Meats has enormous potential as a short-term investment. Of course, as the company belongs to a relatively volatile market, we do think there are long-term investment risks, but - as a short-term investment - Beyond Meats could be great. As with any investment strategy, make sure to keep up with global and finance-related news releases.
Have a great week ahead,
Koki Mashita, Founder and Partner.