Beyond Meat, Inc. (BYND) shares rose more than 10% during Thursday's session after McDonald's Corporation (MCD) announced a 12-week pilot of a plant-based burger made with a Beyond Meat patty across 28 restaurants in Ontario. The latest pilot boosts hopes that Beyond Meat, Impossible Foods, and other meat alternatives will continue to gain traction among consumers.
William Blair analyst Jon Andersen wasn't surprised by McDonald's announcement and is encouraged by Beyond Meat's involvement. However, Stephens analyst Will Slabaugh doesn't expect a near-term "full blown" alternative beef roll-out in the United States due to supply chain reasons. He added that alternative chicken products from Tyson Foods, Inc. (TSN) would be more likely in 2020 and 2021.
The move follows other fast food restaurants that have embraced plant-based burgers, including Burger King, Carl's Jr., White Castle, and numerous others. Customer adoption has been generally positive, but it could take some time for the supply chain to come together and support a national roll-out.
From a technical standpoint, the stock rebounded from the lower end of its price channel to briefly touch the 50-day moving average at $166.01 before turning lower later in the session. The relative strength index (RSI) moved toward neutral levels with a reading of 46.29, while the moving average convergence divergence (MACD) continues to trend in a neutral direction. These indicators provide few hints of where the price could be headed over the near term.
Traders should watch for a breakout from upper trendline resistance at $172.00 toward prior highs of around $240.00 over the coming sessions. If the stock breaks lower, traders could see a move toward lower trendline support at $136.50. The new McDonald's pilot project provides a much-needed catalyst for Beyond Meat stock, but traders will be closely watching the company's upcoming earnings announcement in early November.
The author holds no position in the stock(s) mentioned except through passively managed index funds.