Beyond Meat, Inc. (BYND) shares rose to fresh post-IPO highs of $105.25 before falling 2% during Thursday's session. Since its IPO, the stock has risen nearly 50% as investors bet that plant-based meats will replace a significant portion of meat sales at fast food chains.
Earlier this morning, YUM! Brands, Inc.'s (YUM) KFC division confirmed that it will test plant-based meat products if the consumer response to Impossible Foods and Beyond Meat remains positive. The move comes shortly after McDonald's Corporation (MCD) CEO Steven Easterbrook told CNBC on Wednesday morning that his company is taking a serious look at plant-based meat products. These developments suggest that the plant-based meat market could soon be heating up.
Despite these positive developments, analysts have shown only tempered enthusiasm. JPMorgan analyst Ken Goldman initiated coverage on Beyond Meat stock last week with an Overweight rating and a price target of $97.00 per share. Despite a bullish outlook on the industry, the analyst cited the stock's valuation and "very high" expectations for the Neutral-equivalent rating. Other analysts have initiated the stock with Neutral ratings and price targets ranging from $70.00 to $85.00 per share.
From a technical standpoint, the stock broke out from an ascending triangle pattern to fresh highs before moving lower to test the breakout support line. The relative strength index (RSI) moved further into overbought territory with a reading of 77.41, however, suggesting that the stock could see some near-term profit taking following its significant move higher.
Traders should watch for a rebound from trendline support levels at around $96.86 over the coming sessions in order to support a renewed move higher. If the stock breaks down from these levels, traders could see a move toward trendline and Fibonacci support levels at around $88.59.
The author holds no position in the stock(s) mentioned except through passively managed index funds.