Beyond Meat, Inc. (BYND) shares fell nearly 4% on Tuesday after Oppenheimer initiated coverage of the stock with a Market Perform rating and no price target. Analyst Rupesh Parikh is bullish on the company's brand, product assortment, innovation track record, and long-term prospects. However, Parikh believes that the current valuation is pricey given the increasing competition and potential for selling pressure following the lock-up expiration. These dynamics could create "muted upside potential" in the near term.
These sentiments mirror those of many other analysts covering the stock, which are generally bullish on the long term and hesitant about short-term valuation. Beyond Meat faces mounting competitive pressure from both Impossible Foods Inc. – a privately held competitor – and larger companies that may be exploring meatless products of their own.
The biggest near-term catalyst for Beyond Meat stock could be the potential for a national roll-out at McDonald's Corporation (MCD). According to William Blair, there could be a potential for a global partnership between the two companies. The speculation is driven by the fact that McDonald's is testing Beyond Meat menu items at some of its Ontario locations.
From a technical standpoint, the stock retested trendline support and prior lows near $75.00 during Tuesday's session. The relative strength index (RSI) fell near oversold levels with a reading of 33.19, while the moving average convergence divergence (MACD) remains in an uptrend toward the zero line. These indicators suggest that the stock could see a turnaround and resume its previous uptrend if sentiment improves.
Traders should watch for a breakdown from trendline support at around $77.00 over the coming sessions. If that occurs, traders could see a move to reaction lows of around $62.00 over the intermediate term. If the stock rebounds from trendline support, traders could see a move higher to close the gap near $96.00 over the intermediate term. Most analysts remain bullish over the long term, but the short term is cloudy.
The author holds no position in the stock(s) mentioned except through passively managed index funds.