BYND stock forecast: a mis-steak?

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The Beyond Meat stock forecast is mixed. Will 2022 be well-done?

There is a lot to chew over with the Beyond Meat stock forecast right now. BYND starts 2022 with its plant-based Beyond Italian Sausage on Pizza Hut pizza, flatbread and pasta menus across Canada and Beyond Fried Chicken at KFC restaurants across the US. The ink is dry on the lease for a research and development (R&D) centre in Shanghai.

The KFC roll-out has been more than two years coming, after test markets in 2019 in Atlanta, then Nashville, Charlotte and Southern California in 2020. Beyond also has a deal with KFC in China, where the R&D facility is expected to open in the first half of 2022 and augment the existing factory in Jiaxing, Beyond’s first such facility outside the US.

If you have been following Beyond Meat share price news for some time now, you will know that it is a volatile stock, to say the least, especially around the time when results are being announced. Wall Street drama and disappointing quarterly results plunged the long-term Beyond Meat stock forecast into doubt. Restaurant closures and a return to normal shopping habits hit the company’s sales hard.

When Beyond Meat reported its third quarter 2021 results on 10 November, it showed net revenues increased 12.7% year-on-year to $106.4m, but there was also a net $54.8m loss, or $0.87 per common share, and adjusted $36.8m earnings before interest, taxes, depreciation, and amortisation loss.

CEO and president Ethan Brown said:

“The headline for the third quarter relative to our expectations at the onset of 2021 is that it was a difficult operating environment, highly variable demand, reflecting the Q2 retreat and then Q3 reemergence of COVID in the form of the delta variant, sustained labor shortages impacting certain customers, as well as our own facilities and other high-impact supply chain disruptions are among the challenges characterized in the quarter”.

Beyond Meat share price forecast: cut to the bone?

So, where does all of this leave Beyond Meat stock predictions going forward? Well, you could argue that the disruption to demand from restaurants is a mere blip, a temporary measure, and things will begin to return to normal in the fullness of time. Indeed, the company is announcing brand-new partnerships all the time.

The other thing that is having an impact on the Beyond Meat stock forecast going forward is the intensifying levels of competition in this space, such as from Impossible Foods and titans like Nestlé. They arepouring billions of dollars into this space, fearful that they will be shunned by their customers unless they offer meat-free alternatives to consumers who are increasingly conscious about the environment and their health.

Deals with McDonald’s and Yum Brands are key to the BYND stock price forecast, according to Morningstar equity analyst Rebecca Scheuneman. The global market for plant-based meats (PBM) is expected to grow from 2020’s $21bn to $79bn by 2030 — or 14% a year, according to Euromonitor.

A Morningstar equity report said Beyond growth would be driven by 20% of consumers who are willing to change their buying and eating habits to benefit the environment. Beyond products emit 90% fewer greenhouse gases and need 93% less land, 99% less water and 46% less energey to produce than meat equivalents. 

“The products offer a great solution for China, which does not have enough arable land to feed its huge population, and a great fit for India’s large vegetarian population,” said Scheuneman, who valued the stock at $119.

She expects Beyond’s marketshare to increase from 2% in 2020 to 8.3% by 2030, while “PBMs gain a larger share of the overall meat category and Beyond’s brand continues to win with consumers”.

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Beyond Meat share news: reasons to be cheerful?

The company saw a decline from the $149.9m record net revenues in the previous quarter. CEO Brown blamed the third quarter operations loss on hiring more staff, higher marketing and legal costs, increased production trials, and higher costs of outbound freight.

Like many in the US, Brown said, heading into the Memorial Day long weekend, the unofficial start to summer, felt like the pandemic was receding and it appeared to be an opportunity to resume activities with strategic partners. Then the delta variant hit and the company did not see sustained recovery. There was an uptick in drive-thru, but the majority of customers rely on in-store and in-venue sales.

The company continues its five-year partnership with food scientists at Stanford University, researching the health benefits of plant-based meat. Brown said the company will come out stronger in 2022 with health messaging.

As Brown explained to analysts:

“I think more and more consumers now are really focused on climate, right? And so you've heard me say in the past that that's something that we market best directly around. But to the extent we can empower consumers who are feeling pretty helpless about what to do in their own individual lives about this. We're going to talk about that as well in 2022. So I think you'll see our most aggressive marketing to date in terms of focus and spend on those broader attendant benefits of our products”.

Beyond Meat, Inc.
Daily change
Low: 10.1
High: 10.68

But first, the rest of the fourth quarter. At the top of the list for the outlook was the near-term uncertainty of the pandemic, which took a turn for the worse when the omicron variant spread rapidly at the end of 2021 and start of 2022, further disrupting demand, labour supply and supply chains. In the third quarter outlook, management incorrectly assumed reasonable containment of the virus in the US and abroad. The quarter contains five fewer shipping days than the same period a year earlier.

The company’s guidance for the fourth quarter has net revenues running $85m to $110m.

Given all of this turbulence and uncertainty, let’s wrap up with a look at the Beyond Meat stock price forecast. To cut a long story short, BYND may face an uphill struggle if it wants to see its shares rise in the 12 months ahead.

According to CNN Money, the 14 analysts offering 12-month price forecasts for Beyond Meat Inc have a median target of $72, with a high estimate of $106 and a low estimate of $45. 

Zooming out to analyst recommendations, it is an exceedingly mixed picture, meaning your own research is recommended. The current consensus among 20 polled investment analysts is to hold stock in Beyond Meat Inc. This rating has held steady. Eleven say hold, six say sell, one rates it underperform and only two say buy.

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