Shares of Beyond Meat (BYND), the US faux meat producer, have been one of the best stock market performers since the beginning of the new year, as they have gained more than 63% up to now. The stock has gapped higher once again today on the back of very good sales data.
Fundamental analysis: Sales expand significantly
The company’s sales of plant-based meat alternatives rose to $75 million over the 52 weeks ending on Oct. 6, 2019, which represents an increase of 135% compared to the previous 52-week period, according to Information Resources (IRI), a Chicago-based market research firm.
“Beyond Meat is seeing the strongest growth as it works to increase distribution across most channels,” said Tim Grzebinski, client insights principal at I.R.I, before adding that almost all plant-based elements are gaining market share in their respective categories.
Moreover, it was announced last week that McDonald’s, the world’s biggest fast-food chain, could eventually sell more than 250 million of Beyond Meat’s plant-based burgers (P.L.T) annually.
The fast food chain is currently only testing plant-based Beyond Meat burgers in Canada. This partnership alone could add around $325 million in sales to Beyond Meat annually.
“We believe Beyond Meat has a first-mover advantage – for now – but it appears a door remains open for McDonald’s to refine its P.L.T. offering before introducing a plant based patty in the United States. Further, we do not know whether MCD plans to single-source or multi-source a U.S. menu item,” analyst Steven Strycula wrote.
In addition, McDonald’s plans to expand its testing base and add 52 additional locations in the United States.
Following a set of positive news surrounding Beyond Meat, research firms increased the price targets for the stock. For instance, Credit Suisse set a target at $125, from the previous $115.
Howard also upgraded the stock to “overperform”.
“We believe that BYND has significant growth potential in Europe, which could more than double its total addressable market,” their analyst wrote.
Technical analysis: Open road to $135
Without a doubt, shares of Beyond Meat are incredibly strong at the moment. Only today, the stock trades more than 12% higher and that is after it had gained more than 50% in the previous two weeks.
The momentum is likely to resume given the positive environment that surrounds the company. Technically, the bulls have no significant resistance until $135 where the important Fibonacci retracement level is located. This level is a home to the December high of $135.23, which is also the 3-month high for the stock.
Beyond Meat has enjoyed a great start to the year. The company’s pilot partnership with McDonald’s is expected to expand further and may ultimately lead to $300m+ in revenues. Technically, the price has enough room to add a further 10% to its market value.