Beyond the stock of meat it collapses. What is behind the movement.

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Beyond meat

fell on Wednesday after an analyst Piper Sandler downgraded its stock rating due to concerns that the herbal meat producer may not live up to high expectations. A price cut from rival Impossible Foods also weighed on the shares.

Analyst Michael Lavery downgraded his Beyond Meat (ticker: BYND) rating to Neutral from overweight, and the target price was $ 125 from $ 144. Although he still believes that Beyond Meat will benefit from being an early leader in fake meat – a potential category of up to $ 8 billion by 2025 – he believes consensus estimates are currently too high and the company’s sales in the fourth quarter it could disappoint again.

Lavery warns that delivery data to retailers shows that Beyond Meat, which posted lower-than-expected sales in its third-quarter earnings report, may face a similar problem to its fourth-quarter figures, a model which could persist this year. He believes that consensus estimates for income will have to fall.

However, he is less concerned with other aspects of the company’s business.

Sales from

McDonald’s

(MCD) The McPlant initiative will be an opportunity for Beyond Meat, even though, historically, McDonald’s has rarely highlighted brand partnerships with suppliers. The stock fell at the initial announcement in November, as the restaurant giant did not specify that it would use Beyond Meat. However, Lavery writes that there is a chance that Beyond Meat will get a hit from McDonald’s. He writes that the partnership is valuable to Beyond Meat in both directions, even if “its visibility is not as strong as” Impossible Whopper “at Burger King, of course.”

Lavery has one eye on growing competition, although he is not as worried as some bears. He notes that while Beyond Meat and Impossible Private Foods have gained ground, more established players such as

KelloggS

(K) Morningstar Farms has also managed to grow. This is due to the fact that “new entrants can validate both the category with consumers and can contribute to increasing visibility. We believe that the dynamics can be similar to drinks, where

Coca Cola

(KO) and

peptic

(PEP) both can benefit from the other’s expenses per category. “This is a theory that other analysts support.

Beyond the Meat competition, it does not stand still in terms of the search to attract more sales. Impossible Foods today announced the second price reduction in a year, as it relates to juice sales. The move – which the company said will not be its last – brings the Impossible Burger to about $ 6.80 per pound, still higher than the $ 2 to $ 3 price of beef burgers, but at a discount 15% compared to the previous level.

Beyond Meat fell 2.4% to $ 123 in recent trades.

Write to Teresa Rivas la [email protected]