BYND stock is bouncing back nicely Wednesday after falling as much as 25% in yesterday’s trading session following analyst downgrades.
Big Success Since IPO
Beyond Meat Inc (NASDAQ:BYND), which is involved in the production of plant-based meat, has been one of the biggest success stories on Wall Street, and following its initial public offering this year, BYND stock shot up by as much as 570% from its listing price. It has become a bigger success than mega companies like Uber (NYSE:UBER), but yesterday, even the most bullish analysts on Wall Street seemed to cool down a bit in their outlook about the stock. The shares crashed by as much as 25% on Tuesday and hit $125.23.
The company’s alternative meat products have created a massive buzz after some of the better-known restaurant chains like Chanticleer Holdings and Tim Horton’s started testing its offerings. That being said, the 570% surge since IPO in BYND stock simply does not seem to be in sync with its expected sales going forward.
Last Friday, the stock went up over 35% following solid earnings guidance for the current quarter.
J.P. Morgan Downgraded BYND Stock
Men Goldman at J. P. Morgan Chase downgraded the stock rating from overweight to neutral and stated that it was a bit too expensive for his liking. He went on to state that the $10 billion was unrealistic since that is 27 times the company’s sales for 2020. In his note, Goldman observed, “This downgrade is purely a valuation call. With a valuation, this elevated, any hiccups in performance- real or perceived- could lead to a meaningful correction in the share price.”
In other words, the analysts are saying that Beyond Meat’s business idea might be sound, but at this point in time, the company does not have the sales to drive such growth.
BYND stock has recovered by a healthy 17% on Wednesday as some investors returned to pick up shares at a price that they thought was a discounted one.
It remains to be seen how BYND stock behaves over the next few weeks to come to a definite conclusion about market sentiments about Beyond Meat.
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