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Beyond Meat Inc BYND

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Beyond Meat Share Price Weakness on Cautious Guide Provides Buy Opportunity Ahead of 2022 QSR Ramp

Analyst Note

| Rebecca Scheuneman, CFA |

Beyond Meat reported second-quarter sales of $149 million, topping our $140 million estimate and the $142 million mark for FactSet consensus. But this strength was overshadowed by cautious third-quarter revenue guidance of $120-$140 million versus our $174 million estimate and $152 million for FactSet consensus. Management attributed its cautious stance to uncertain food-service demand given the recent uptick in COVID-19 cases and restaurant labor shortages, a shift of the July 4 holiday from the third quarter to the second, and the recent loss of 5,000 Dunkin Donuts doors. While the latter has a lasting impact, resulting in a 3% drop in our $144 fair value estimate, we do not think the development (or the firm’s cautious tone) implies waning consumer interest. We expect setbacks from time to time due to a misalignment with Beyond Meat’s products and a restaurant’s customer base, or poor execution. We maintain our stance that plant-based meats will play a significant role in feeding the world, given growing emerging market per capita consumption of meat juxtaposed with fixed agricultural resources. We think Beyond Meat, the market leader, will continue to be a major player in the market, although limited visibility on the durability of its brand in a quickly evolving marketplace keeps us at our no-moat rating.

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Company Profile

Business Description

Beyond Meat is a provider of plant-based meats, such as burgers, sausage, ground beef, and chicken. Unlike other vegetarian products, Beyond Meat seeks to replicate the look, cook, and taste of meat, is targeted to omnivores and vegetarians alike, and is sold in the meat case. The products are widely available across the U.S. and Canada and in 83 additional countries as well. International revenue represented 20% of 2020 sales. The firm’s products are available in retail stores and the food-service channel. In 2019, before the pandemic struck, sales were evenly split between these two channels, although mix changed to 74% retail/26% food service in 2020. We think the recovery from the crisis and new deals with McDonald's and Yum Brands will return food-service sales to 50% by 2022.

Contact
119 Standard Street
El Segundo, CA, 90245
T +1 866 756-4112
Sector Consumer Defensive
Industry Packaged Foods
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Speculative Growth
Employees 700