Baird Bullish On Beyond Meat, Predicts $1.9B Revenue By 2023

Beyond Meat Inc BYND shares traded higher on Thursday after one Wall Street analyst initiated bullish coverage of the stock.

The Beyond Meat Analyst: Baird analyst Ben Kallo initiated coverage of Beyond Meat with an Outperform rating and a $160 price target.

The Beyond Meat Thesis: Kallo said he is bullish on Beyond’s long-term growth outlook given its rapidly expanding brand equity and its massive addressable market.

“We model substantial revenue growth over the next several years, driven by increasing distribution (domestically + internationally), increasing velocity per point of distribution, and introduction of new products,” Kallo wrote in the note.

Baird estimates Beyond will end 2020 with manufacturing capacity to support more than $1 billion in gross revenue. Over time, Kallo says Beyond should continue to gain market share from beef eaters due to growing consumer trends in health, wellness and sustainability. Beyond’s U.S. household penetration rate has already increased from 2% in June 2019 to 4.9% in June 2020.

Kallo said his price target represents a seven times EV/Revenue multiple based on 2023 estimates, which he admitted is a steep valuation. However, he said Beyond’s impressive growth numbers justify its large valuation premium. Baird is calling for Beyond’s annual revenue to grow from $503.1 million in 2020 to $1.907.5 billion in 2023.

Benzinga’s Take: Even at Kallo’s optimistic EPS growth trajectory, Beyond stock is already trading at more than 75 times 2023 earnings. The key to more upside for Beyond in coming years will be just how much is already priced into the stock and how well will the company be able to execute its market share expansion strategy.

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