News

Beyond Meat Stock Surges

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Andrew R. Michaud

• February 28, 2024

Shares of Beyond Meat the company that sells plant-based versions of beef and chicken, skyrocketed early Wednesday as investors were cheered by the outlook for better profits.

CEO's Focus on Sustainability and Profitability

Chief Executive Officer Ethan Brown said on a conference call that the company was working hard to move from a “growth at all costs operating model” to one that is highly focused on sustainability and profitability. That means significantly reducing its operating budget and cash use this year.

Beyond Meat has plans to increase profit margins both by reducing costs and raising prices. The stock surged 56% to $11.56 in premarket trading. Coming into the session, it had fallen 16% this year and 56% over the past 12 months.

Analysts' Skepticism

Wall Street analysts were more skeptical than traders, however.

“Our experts have told us that the company ‘needs to get in survival mode,’” said John Oh, an analyst at Third Bridge. “The cost savings initiatives and manufacturing optimization efforts are crucial for Beyond Meat given where the sector as a whole is currently.”

The team at Mizuho led by John Baumgartner maintained an Underperform rating on the stock with a price target of $5.

Challenges Ahead for Beyond Meat

The cost cuts and savings “are responses to precarious financials, given sharp sales declines and limited progress in expanding consumption beyond early adopters,” Mizuho wrote in a note. “Much heavy lifting remains to achieve sales growth.”

Vital Farms was up 0.6% early Wednesday, B&G Foods jumped 5.3%, Tyson Foods slipped 0.6%, and General Mills was little changed. Futures for the broad S&P 500 index were down 0.4%.