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Beyond Meat Inc BYND

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Morningstar’s Analysis

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After Overblown Angst About Fading Interest in Plant-Based Meat, Shares of Beyond Meat Should Sizzle

Analyst Note

| Rebecca Scheuneman, CFA |

We think shares of no-moat Beyond Meat look compelling after falling 48% in 2021, versus the 5% increase in the Morningstar Packaged Food index. Investors grew concerned about decelerating growth of the plant-based meat category in U.S. retail outlets, which increased 8% in 2021 per Euromonitor, down from 45% in 2020. In our view, this deceleration does not reflect waning interest but difficult comparisons caused by the pandemic-driven surge in grocery sales in 2020. Sales of meat alternatives in U.S. retail outlets were $1.8 billion in 2021 per Euromonitor, a 57% increase over 2019, pointing to strong demand. We think this misconception presents a buying opportunity, with Beyond shares trading at a 45% discount to our $119 fair value estimate.

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Company Profile

Business Description

Beyond Meat is a provider of plant-based meats, such as burgers, sausage, ground beef, and chicken. Unlike other vegetarian products, Beyond Meat seeks to replicate the look, cook, and taste of meat, is targeted to omnivores and vegetarians alike, and is sold in the meat case. The products are widely available across the U.S. and Canada and in 83 additional countries as well. International revenue represented 20% of 2020 sales. The firm’s products are available in retail stores and the food-service channel. In 2019, before the pandemic struck, sales were evenly split between these two channels, although mix changed to 74% retail/26% food service in 2020. We think the recovery from the crisis and new deals with McDonald's and Yum Brands will return food-service sales to 50% by 2022.

119 Standard Street
El Segundo, CA, 90245
T +1 866 756-4112
Sector Consumer Defensive
Industry Packaged Foods
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Speculative Growth
Employees 700