(Bloomberg) -- Beyond Meat Inc. shares plunged on plans to offer shares, and fresh price targets show analysts see further declines for the stock after its meteoric rally since its debut three months ago.
The vegetarian burger company fell as much as 17% to $183.50 at 9:45 a.m. in New York. The offering gives insiders like Chief Executive Officer Ethan Brown and other early investors a chance to sell some of their shares ahead of schedule to cash in on the stock's six-fold rally since trading began in May. A handful of analysts covering the stock increased their price targets but still remain well shy of where the stock has been trading, despite positive takes on the company's strong profit margins and boosted outlook.
Bernstein's Alexia Howard raised her yearlong price target to a Street-high $172 from $123. But the boost wasn't enough to close the gap between analyst projections and the current share price, which is trading about twice the current average target of $107 per share. Howard increased her multiple, but “we can't get there on valuation at this time,” she said in a note to clients Tuesday. She continues to rate the company market perform.
Read More: Beyond Meat 2Q Sales, Margins Were ‘Strong,' Bernstein Says
Meanwhile, JPMorgan analyst Ken Goldman wrote “fundamental momentum may matter more than valuation” in a note raising his 18-month target to $188 from $121. He cautions being too negative on Beyond may be “a risky proposition” with short interest nearly half of the available float, improving Nielsen data and the possibility of more beats and raises.
Bearish bets in the stock hover around 44% of the free float, according to financial analytics firm S3 Partners. With six neutral ratings and one sell, no analyst on the Street rates the company a buy.
To contact the reporter on this story: Cristin Flanagan in New York at cflanagan1@bloomberg.net
To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Jennifer Bissell-Linsk
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