Wells Fargo Analyst Says Beyond Meat's Stock Has Downside To $72

Beyond Meat Inc's BYND stock has downside potential of more than 30%, Wells Fargo analyst John Baumgartner said Thursday in a CNBC interview.

Beyond Meat's stock recently moved north of $100 per share amid three favorable news reports, Baumgartner said. They are: 

• Beyond Meat's chief rival Impossible Food confirmed it won't pursue a deal with McDonald's Corp MCD.
• Beyond expanded its "PLT" sandwich tests with McDonald's Canada.
• Talk of a potential expansion into China.

These encouraging reports may have triggered a "fair amount" of short squeezing in the stock, the analyst said. 

Beyond Meat's products in Canadian restaurants are performing better in urban areas, but the "geographic appeal is still very well unknown at this point," he said.

A few factors could help the industry, but their impact on Beyond Meat remains unclear, Baumgartner said.

For example, the industry is embracing new technologies to help create better products at lower prices, he said, adding that there are "tens of thousands" of potential edible plants that could contribute to a "better nutritional profile."

Beyond Meat's ultimate growth potential is limited in its ability to grow its supply, the analyst said.

For the time being, there are still "bottlenecks in the system," he said. 

Beyond Meat shares were trading 3.97% higher at $111.33 at the time of publication Thursday. 

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Photo courtesy of Beyond Meat.