(Bloomberg) -- Analysts are warming up to Beyond Meat after a lockup expiry wiped out a quarter of the stock's market value.
Shares rose as much as 5.5% in early trading on Thursday as Berenberg analyst Donald McLee initiated the stock with a buy rating and a price target of $100. The recent pullback provides an attractive entry point as shares hold long-term value, he wrote in a note.
While competitive risks remain, they “may be overblown at current levels,” McLee said. A blind test at Berenberg revealed “significant disadvantages” in taste and appearance for a rival veggie product from Nestlé SA, which the analyst sees as the biggest emerging threat to Beyond Meat.
Shareholders, including executives and board members, have sold millions of shares since the IPO lockup expired on Oct. 29, even as CEO Ethan Brown vowed to keep his stake.
The stock's 14-day relative strength index (RSI) shows shares are currently oversold, according to data compiled by Bloomberg, which indicates a potential rebound. Shares in the plant-based meat maker are up 4.3% so far this week, after eight consecutive weeks of losses. Since going public, however, the stock is still up 229%.
To contact the reporter on this story: Tatiana Darie in New York at tdarie1@bloomberg.net
To contact the editors responsible for this story: Catherine Larkin at clarkin4@bloomberg.net, Jennifer Bissell-Linsk
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