What happened
Beyond Meat's (NASDAQ: BYND) stock price climbed on Monday after Citigroup analyst Wendy Nicholson lifted her rating on the meat alternatives company from sell to neutral and boosted her price forecast. As of 2:55 p.m. EDT, Beyond Meat's shares were up more than 4%.
So what
Nicholson's upgrade comes after a 10% decline in Beyond Meat's stock price following her sell call in July. Yet even as investors have become more concerned about intensifying competition from the likes of Impossible Foods and large packaged food companies, Nicholson's research shows that Beyond Meat's sales have continued to expand at rates above 60% in key retail channels. Moreover, she believes Beyond Meat's new e-commerce site can be a significant growth driver for the company. Nicholson, in turn, raised her price forecast for Beyond Meat's stock from $123 to $141.
The bears are becoming more bullish on Beyond Meat's stock, though not quite bullish enough to recommend the stock. Image source: Getty Images.
Still, Nicholson remains uneasy about Beyond Meat's profit margins, as well as its stock's rich valuation. "While we are less negative today on BYND than we were at the time of our launch of coverage, we are still not ready to recommend the shares with a buy rating," she said in a research note to investors.
Now what
When bears become less bearish, it's usually a good sign that a stock could be about to head higher. And if Beyond Meat can continue to grow at a brisk pace despite rising competition, it's a signal that skeptics may be underestimating the power of its brand. It can also be a sign that the market for plant-based food is large enough to support multiple winners -- of which Beyond Meat could be the biggest.
10 stocks we like better than Beyond Meat, Inc.
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Beyond Meat, Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.
*Stock Advisor returns as of August 1, 2020
Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Beyond Meat, Inc. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
