What happened
Investors weren't enjoying the taste of Beyond Meat (BYND 0.16%) stock on Tuesday. On a day when many stocks saw pleasant rises and the S&P 500 index advanced by nearly 1%, Beyond Meat was a laggard, shedding more than 0.9% of its value. The price-reducing ingredient was a rather critical new research note from an analyst tracking the stock.
So what
That morning, Piper Sandler prognosticator Michael Lavery reiterated his underweight (read: sell) recommendation on Beyond Meat stock, and his $12-per-share price target.
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Lavery wrote that the company's retail sales are continuing to slide. This has been masked somewhat by the success of its recently introduced line of Beyond Jerky, which was rolled out across the U.S. in March.
According to the analyst, Beyond Jerky -- hyped as the company's "first-ever innovation in the snack category" -- was expected to be on the shelves of more than 80,000 stores by the end of May, making it the largest product launch in the ambitious food company's relatively short history.
Per Lavery's analysis, Beyond Jerky is a popular product among consumers. That isn't enough, however, to compensate for the downward performance of the rest of Beyond Meat's portfolio. Lavery wrote that in the week ending May 15, total company sales fell at roughly 3%. Excluding Beyond Jerky reveals a much deeper decline, of around 16%.
Now what
This is a worrying take on Beyond Meat's business, but it doesn't mean the company's future is necessarily bleak. Yes, it's still subject to intense competition from rival alt-protein makers and old-line comestibles companies, but if it can come up with a few more hot retail products like Beyond Jerky, those sales could head north again. We shouldn't count this company out of the fake-meat game quite yet.
