What's The Beef? Analysts Initiate Coverage On Beyond Meat

Beyond Meat Inc BYND makes a plant-based food product meant to serve as a substitute for meat. The stock has more than tripled since its IPO debut in early May and on Tuesday, multiple Street analysts released their initial recommendations on the stock.

JPMorgan: $5B Revenue Opportunity

Plant-based substitutes for meat could soar in size from $1 billion today to a total addressable market of $100 billion within 15 years, JPMorgan's Ken Goldman wrote in the note. Beyond Meat managed to scientifically replicate ground beef from plant protein. The company's dedication towards innovation could result in seeing sales of $5 billion over time versus $88 million last year.

The bullish case for Beyond Meat's stock is based on the fact it only needs to capture a "fraction" of the market to be successful, according to Goldman. A "reasonable" 5 percent market share of sales over time isn't fully priced into the stock, even after a strong post-IPO rally.

Goldman initiated coverage of Beyond Meat with an Overweight rating and $97 price target.

Credit Suisse: No Beef Against The Company

The plant-based meat industry is likely to become a $100 billion market over time but even assuming a conservative outlook, Beyond Meat's sales are likely to reach $2.5 billion in fiscal 2029, Credit Suisse's Robert Moskow wrote in a note. This best-case scenario is already factored into the stock at current levels and implies a rapid sales growth of 60 percent in 2020 and 40 percent the following year.

The research firm's $70 price target is based on an EV/Sales multiple of six times 2025 sales estimates and discounted back at a 9 percent rate. The multiple is consistent with other consumer companies growing at similar paces due to a disruptive product in an attractive segment.

Moskow initiated coverage at Neutral with a $70 price target.

Elsewhere On The Street

Goldman Sachs (Neutral, $67 price target) said Beyond Meat remains in the "early innings" of an industry-wide transformation towards plant-based protein products, CNBC quoted the firm as saying.

Jefferies (Hold, $85 price target) said the company is backed by a strong leadership team and growing brand equity. Expectations are "very high," especially at 11 times fiscal 2021 EV/sales.

Bank of America (Neutral, $85 price target) said the company's product quality and positioning are strong within the growing addressable market, but the stock's valuation prices the company at nearly $5 billion is 16 times fiscal 2020 estimated revenue.

Price Action

Beyond Meat's stock traded higher by 7.7 percent at $85.87 per share at time of publication.

Related Links:

Credit Suisse Waits For Beyond Meat To Reach Perfect Temperature

Beyond Meat Holds Tremendous Growth Opportunity, JPMorgan Says In Bullish Initiation

Photo courtesy of Beyond Meat.