Should I invest in Beyond Meat shares after Citigroup raised its price target to $184?

By: Stanko Iliev
Stanko Iliev
Stanko dedicates himself to providing investors with relevant information they can use to make investment decisions. He loves the… read more.
on Mar 14, 2021
  • Beyond Meat expands product offerings at Walmart
  • Citigroup assigned a buy rating on Beyond Meat with a $184 price objective
  • The current risk/reward ratio is not good for the long-term investors

Beyond Meat (NASDAQ: BYND) shares have advanced from $114 above $221 since January 2021, and the current price stands around $142. The current risk/reward ratio is not good for the long-term investors, and there are certainly better long-term investment opportunities at the moment.

Fundamental analysis: Citigroup assigned a buy rating on Beyond Meat

Beyond Meat is a Los Angeles-based producer of plant-based meat substitutes with products designed to emulate chicken, beef, and pork sausage. Beyond Meat shares have found strong support above $120, but the Covid-19 pandemic continues to impact its business.

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Beyond Meat reported Q4 results in February; total revenue has increased by 3.5% Y/Y to $101M while Q4 GAAP EPS was -$0.40 (missed by $0.27). Total revenue has increased below the expectations (-missed by $2.17M) and the main reason for this was a slowdown in its foodservice business due to the Covid-19 and restrictions on foodservice locations.

The pullback in foodservice volume has also manifested in gross margins, while the management of the company expects a recovery in the foodservice business to generally lag the broader foodservice sector.

The positive news is that Beyond Meat expands product offerings at Walmart within the approximately 2,400 locations nationwide.

Citigroup assigned a buy rating on Beyond Meat with a $184 price objective as it sees this company as an obvious economy reopening pick. Citigroup reported that the issues that impacted Q4 results were temporary, and once we passed this pandemic, BYND’s top-line momentum can get back on track.

Argus also assigned a buy rating on Beyond Meat on expectations that environmental concerns could be a key demand driver for meat alternatives, especially among younger consumers.

“We view Beyond Meat as the leading company in the plant-based protein space, with a widely recognized brand and prospects for continued market share growth. We expect demand for plant-based alternatives to continue to grow, driven not only by consumer preferences for healthier food but also by environmental concerns, as modern industrialized meat production is increasingly recognized as harmful for the environment,” said John Staszak, an analyst from Argus.

Beyond Meat shares could advance again above the $160 resistance level, but my opinion is that there are certainly better long-term investment opportunities at the moment.

Technical analysis: $130 represents a strong support level

Data source: tradingview.com

Beyond Meat shares have weakened from their recent highs above $221 registered in the last week of January, and the current price stands around $142. The critical support levels are $140, $130, and $120; $160 and $180 represent the important resistance levels.

If the price jumps above $160, it would be a signal to trade shares, and the next target could be around $170, but if the price falls below the $130 support level, it would be a firm “sell” signal.

Summary

Beyond Meat shares have weakened from their recent highs above $221 registered in the last week of January, and the current price stands around $142. Citigroup assigned a buy rating on Beyond Meat with a $184 price objective, but my opinion is that there are certainly better long-term investment opportunities at the moment.

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