By CCN.com: Beyond Meat stock tumbled 4% in today’s pre-market trading following the announcement of a new competitor – Tyson Foods. The poultry powerhouse is set to enter the meatless arena later this summer, beginning with a plant-based “chicken” nugget. Beyond Meat investors pulled it together. The stock price is already back in the green for the day.
Previously an investor in Beyond Meat, Tyson Foods sold its stake in April just before the company went public. The investor-investee relationship between the two took a turn for the worse once Tyson decided to create its own line of plant-based products in February.
The decision to separate ties with the plant-focused startup appears to be working out. The Tyson Foods stock price is up nearly 60% since the start of the year. The company is the largest meat producer in the world, consistently a Fortune top 100 company, and boasts $3 billion of profit in 2018. If any old guard food companies can knock out Beyond Meat, it’s Tyson.
Since going public in May, the Beyond Meat stock price has climbed almost 500%. But the future of what stock market analysts and investors once considered a golden child is looking grim. Outside of Tyson Foods, Beyond Meat faces stiff competition from Impossible Foods, which has a notable partnership with Burger King.
Market analysts are beginning to pull back on the Beyond Meat hype, at least temporarily, citing unsustainable price growth, numerous competitors, and an overvaluation of the plant-based meat market. Additionally, studies have surfaced, revealing that plant-based proteins aren’t necessarily healthier than meat alternatives.
Some analysts still have a bullish outlook for the Beyond Meat stock price. Analysts at JPMorgan predict that the company may strike a deal with McDonald’s sometime this year to rival Burger King’s Impossible Burger. Considering that McDonald’s former CEO and COO Donald Thompson sits on the Beyond Meat board, the bet isn’t farfetched. A partnership of this magnitude could boost the stock price an additional 30%.
Beyond Meat’s greatest obstacle comes down to its ability to meet demand, though. Tyson Foods and new market-entrant Nestle have the bankroll and production capacity to take over the market. If Beyond Meat is unable to convince McDonald’s it can meet the fast food giant’s demands, then an established company like Nestle could easily slide in to replace it.
Nestle is already working with McDonald’s in Germany and is looking to extend the partnership globally. So, there’s little wiggle room for any Beyond Meat mistakes.
Last modified: September 23, 2020 12:47 PM