Please ensure Javascript is enabled for purposes of website accessibility

Why Beyond Meat Stock Dropped Today

By Joe Tenebruso – Sep 16, 2021 at 5:23PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The meat-alternatives company could disappoint investors.

What happened

Shares of Beyond Meat (BYND 4.11%) declined on Thursday following bearish analyst commentary. By the close of trading, the plant-based food-provider's stock price was down 2.3% after falling as much as 6.1% earlier in the day.

So what

Piper Sandler analyst Michael Lavery cut his rating on Beyond Meat's stock from neutral to underweight and slashed his price forecast from $120 to $95. Lavery's new estimate implies potential losses for investors of roughly 12% from the stock's current price near $108.25.

A miniature gold bear is on top of a keyboard button labeled sell.

Analysts at Piper Sandler placed the equivalent of a sell rating on Beyond Meat's shares. Image source: Getty Images.

While acknowledging that Beyond Meat remains a leader in the plant-based foods industry, Lavery warned that the company's sales could fall short of investors' expectations. He forecast a 10% decline in Beyond Meat's U.S. retail sales in the third quarter, driven in part by market-share losses. 

Now what

Some people prefer to not eat meat for moral or health reasons. Others see eating more plants and less meat as a way to reduce greenhouse emissions and combat climate change. For these and other reasons, the trend toward meat alternatives and other plant-based foods is likely to continue in the coming years.

However, competition in this steadily expanding industry is intensifying. International food and beverage giants like Nestlé, and even meat processors like Tyson Foods, are ramping up their plant-based offerings. These new rivals are beginning to wrestle away market share from Beyond Meat. Increasing competition is also likely to weigh on Beyond Meat's ability to raise prices, thereby pressuring its profit margins.

For these reasons, the risks for Beyond Meat's shareholders are increasing -- and investors may want to approach its stock cautiously.

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 recommends Nestle. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Beyond Meat, Inc. Stock Quote
Beyond Meat, Inc.
BYND
$12.92 (4.11%) $0.51

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
351%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 11/29/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.