Beyond Meat Rises as Analysts Lift Targets on Retail Boost

(Bloomberg) -- The squeeze on sales suffered by Beyond Meat Inc. due to restaurant closures in the first quarter wasn't as bad as feared, while stockpiling by consumers benefited the group's retail business, analysts said.

UBS Group AG's Steven Strycula noted the faux-meat maker's U.S. retail sales surged 157% year-on-year, and joined analysts at Jefferies and Piper Sandler & Co. in lifting his price target for the stock.

Beyond Meat's shares jumped as much as 18% to the highest intraday since Feb. 26. The shares are now up 54% since the start of the year.

Read how company maintained growth amid restaurant closures.

Here's a summary of what analysts had to say:

Jefferies, Rob Dickerson

Rating hold, raises price target to $95 from $83

A 37% rise in retail sales was offset by a 29% sequential decline in the foodservice division amid lockdowns. As a result, revenue declined about 1% quarter-on-quarter.

Lowering prices via larger frozen product offerings combined with heavier promotions during grilling season should help take incremental share from the beef industry.

Piper Sandler, Michael Lavery

Rating neutral, raises price target to $95 from $72

Food services trends look better than expected, with quick-service restaurant sales down only modestly.

Raises 2020 revenue estimate 26%, 2021 by 29% on more modest foodservice declines, distribution gains in China, and steady retail sales growth.

UBS, Steven Strycula

Rating sell, price target raised to $75 from $73

Retail business was a bright spot with quarterly sales up 157% year-on-year.

However, notes restaurants are placing increased menu emphasis on value items and are hesitant to bring on new offerings.

First-quarter gross margin of 38.8% versus estimate of 31% reflects greater leverage than Street anticipated.

Berenberg, Donald McLee

Rating buy, price target $115

The sales beat was primarily driven by increased volumes in the retail channel due to stockpiling.

Also benefited from new products and international growth amid deals such as a Starbucks partnership in Canada and China.

Overall, restaurant difficulties to outweigh the success in retail. Restaurants accounted for about 50% of 2019 revenue.