What happened
Shares of Beyond Meat (BYND 4.62%) surged sharply higher Monday, jumping as much as 16.6%. As of 2:51 p.m. ET, the stock was still up 14.6%.
The catalyst that sent the maker of plant-based meat substitutes higher was a substantial upgrade from a Wall Street analyst.
So what
Barclays analyst Benjamin Theurer gave Beyond Meat stock a rare double upgrade, to overweight (buy) from underweight (sell). At the same time, the analyst raised his price target on the shares to $80, up from $70. That represents potential gains for investors of more than 41% compared to Friday's closing price.
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"We believe Beyond Meat's growth potential in the U.S. food service channel and the international segment is not properly reflected in the current stock price," Theurer wrote in a note to clients.
While he acknowledges the risk of increased competition in the coming months and years, he believes that the positives for the company far outweigh the negatives, especially when considering the potential for international expansion.
Theurer notes that Beyond Meat is increasing its opportunities both here and abroad "through new partnerships," while noting that the "international opportunity has become more relevant, and the company could well become a global leader in the broader meat alternative market."
Now what
The double upgrade comes just a week after McDonald's announced that it would significantly expand its test of the McPlant burger, which is co-developed and supplied by Beyond Meat.
It's important to note that shares of Beyond Meat have been -- and will continue to be -- volatile. That said, it's still early days for the company, as consumers looking for healthier alternatives gradually adopt plant-based meat substitutes, with Beyond Meat as the principle beneficiary.
The company is executing on its plan to become the de facto provider of meat substitutes, not only expanding the number of distribution channels, but also offering a growing number of plant-based meat alternatives, including patties, crumbles, sausages, and chicken.
If Beyond Meat continues along its current path, patient investors will be amply rewarded.
