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The Case for Beyond Meat By Investing.com

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© Reuters

By Liz Moyer and Christiana Sciaudone

Investing.com — Beyond Meat Inc (NASDAQ:) has soared with the wider embrace of plant-based “meat” products.

They are a far cry from the particle board vegetable-based products of old. Beyond and its competitors are capturing the attention of younger consumers, and inviting big competition from established giants in the food industry.

But shares are trading in the stratosphere, leading many to wonder whether Beyond can keep up the trend.

Investing.com’s Liz Moyer argues the bull case for Beyond Meat (no pun intended), while Christiana Sciaudone writes that it can’t go on forever. This is .

The Bull Case

If teenagers love it, it must be good, right?

Research by Piper Sandler (NYSE:) found that young people were increasingly on board with plant-based food products, prompting analysts at the firm to raise their price target on Beyond Meat earlier this week.

The maker of meatless meatballs, packaged ground meat and sausage products has rallied 157% this year and is well above its May 2019 IPO price of $25. Analysts are expecting Beyond to report full year 2020 profit of 6 cents a share, up from a loss of 29 cents a share last year, and on their way to forecasted profit of 52 cents a share for 2021, according to Zacks.

Net revenue for the second quarter rose 69% from last year. To respond to the Covid-19 crisis, Beyond repackaged its commercial products for sale to consumers during the quarter, incurring costs that pushed the bottom line to a $10 million loss for the period.

The company pointed out that it continued to introduce new products during the crisis, including its value pack called the Cookout Classic, which lowered the cost of its burgers from nearly two-times that of real meat patties to about 20% more per pound.

“Though the Cookout Classic only reached stores in the last 2 weeks of the second quarter, it accounted for 16 points of the year-over-year volume growth in our U.S. retail business,” the company said. “We look forward to continuing to serve our consumers and customers alike as we all hope for a resolution to the COVID-19 pandemic.”

Meatless meat has grown to a big industry, with sales estimated to grow 15% annually for the next few years to reach $27 billion in 2025. It has attracted competition from newcomers like Impossible Burger to established food giants like Tyson as consumers adapt to a healthier lifestyle.

Piper recently asked teens about plant-based meat to gauge consumer preferences. Of the respondents, 47% said they either eat it now or are open to consuming plant-based meat. The research firm also found that interest in plant-based meat rises in younger people, indicating a big base of potential future growth as teenagers grow older and establish their own households.

Beyond’s burgers are supposed to look, cook and satisfy appetites like a traditional beef burger. The company says its meatless meat is made from simple, plant-based ingredients without GMOs, soy or gluten.

It has since branched out to meatballs and breakfast sausage links, which are sold through grocery stores across the U.S., including Kroger (NYSE:), Albertsons, Sprouts, Harris Teeter, Wegmans, and Whole Foods. And it is poised to start production in China at the end of the year.

The company has also expanded a relationship with Walmart, tripling the number of sales outlets for Beyond Burger from 800 locations to more than 2,400 stores. Beyond says its products are available at 112,000 stores in 85 countries.

The Bear Case

Beyond Meat is trading at a material premium to such big wigs as Netflix (NASDAQ:) and Tesla (NASDAQ:). Need I say more?

Beyond Meat is beyond reason, no matter how much one might like plant-based meat.

The stock has rallied this year, and shares spike every time the company publishes a press release — even if it’s old news.

The company is barely eking out profits. Since it went public in May 2019, it has reported just two quarters of actual earnings per share — 3 cents and 6 cents. For the second quarter, the most recent data available, Beyond Meat reported a loss per share of 16 cents — that’s 8 times worse than expected by analysts. Granted, it beat on revenue, but it took in a grand total of $113.34 million for the three months.

The company is valued at $7.81 billion. Let that sink in.

And don’t take my word for it. Check out the analysts that cover Beyond Meat. Shares have two buy ratings, seven holds and six sells. Since analysts hate to ever give sell ratings, those six have more weight than it would initially appear.

So, what’s their beef with Beyond Meat?

In August, Goldman Sachs (NYSE:) reiterated its sell rating with foodservice declining more than 60% from a year earlier.

That same month Jefferies (NYSE:) maintained a hold rating on the stock, even while boosting the price target, because of valuation, according to StreetInsider.

Beyond Meat trades on an enterprise value to sales basis fairly in line with Freshpet (NASDAQ:), but at a material premium to Monster Beverage (NASDAQ:), Netflix, Tesla and McCormick (NYSE:), “all either higher-growth food & beverage companies or sector-specific disruptors,” Jefferies analyst Rob Dickerson said.

In September, JPMorgan (NYSE:) downgraded the stock to underweight from neutral, citing Impossible Foods’s increasing presence on shelves and many restaurants not adding menu items.

“We think the stock is ahead of itself,” JPMorgan analyst Ken Goldman said, according to StreetInsider. Shares are up 30% since that report was published. Imagine what Goldman thinks now.

Going back to the magic of the press releases, every time something is published, it is almost guaranteed that the stock will rise, no matter the content.

Let’s take the recent example of a Sept. 29 announcement that Beyond was doing a major expansion with Walmart (NYSE:), with products being offered at more than 2,400 locations versus the previous 800. Chief Executive Officer, Founder and President Ethan Brown had let the news slip on the Aug. 4 earnings call. No matter. That press release helped shares jump 14% the day it came out, almost two months later. On old news. Something doesn’t smell right here.





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Northrop Grumman Earnings, Revenue Beat in Q3 By Investing.com

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© Reuters. Northrop Grumman Earnings, Revenue Beat in Q3

Investing.com – Northrop Grumman (NYSE:) reported on Thursday third quarter that beat analysts’ forecasts and revenue that topped expectations.

Northrop Grumman announced earnings per share of $5.89 on revenue of $9.08B. Analysts polled by Investing.com anticipated EPS of $5.62 on revenue of $8.87B.

Northrop Grumman shares are down 10% from the beginning of the year, still down 19.90% from its 52 week high of $385.00 set on January 30. They are under-performing the which is up 6.34% from the start of the year.

Northrop Grumman follows other major Technology sector earnings this month

Northrop Grumman’s report follows an earnings matched by Taiwan Semiconductor on October 14, who reported EPS of $0.92 on revenue of $12.4B, compared to forecasts EPS of $0.92 on revenue of $12.4B.

Danaher had beat expectations on Thursday with third quarter EPS of $1.72 on revenue of $5.88B, compared to forecast for EPS of $1.36 on revenue of $5.51B.

Stay up-to-date on all of the upcoming earnings reports by visiting Investing.com’s earnings calendar

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Buyers of Thai distressed assets plan big purchases as debt payment holiday ends By Reuters

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© Reuters. FILE PHOTO: Coronavirus disease (COVID-19) outbreak, in Bangkok

By Orathai Sriring and Satawasin Staporncharnchai

BANGKOK (Reuters) – A pandemic-exacerbated surge in Thai bad loans to nine-year highs and the end of a debt payment holiday are prompting buyers of distressed debt to embark on a shopping spree in Southeast Asia’s second-biggest economy.

About 6.89 trillion baht ($221 billion) of outstanding Thai debt – or 42% of total lending – has been under relief programmes that include payment deferment and reduction, interest rate reduction and restructuring.

The most significant of these – a government-mandated six month debt payment holiday – ended on Thursday.

The Bank of Thailand has said it does not expect sudden and large defaults, but its former chief Veerathai Santiprabhob, whose term ended last month, warned in August bad debt could jump as the economy slumped.

The country’s biggest distressed debt manager, Bangkok Commercial Asset Management (BK:), told Reuters it will spend 12 billion baht to acquire sour loans with a face value of about 40 billion baht this year.

“We will focus on buying debt this year and next,” Bunyong Visatemongkolchai, the bank’s executive board chairman said, adding it planned to issue 25 billion baht of bonds to fund purchases.

Its shares are up 11% this year, versus a 23% drop for the main stock index ().

Easy credit for consumers and businesses for years have prompted many warnings about the dangers of the household debt malaise in Thailand. Those are now proving prescient as the pandemic batters businesses, leaving as many as three million people without work.

Thai household debt is among Asia’s highest, at 83.8% of GDP as of June, the highest level since 2003, while the central bank predicts the trade and tourism-dependent economy could shrink by a record 7.8% this year.

Months of protests against the government and the monarchy could further slow a recovery for the economy.

For a graphic on Thailand’s economy and tourism:

https://fingfx.thomsonreuters.com/gfx/mkt/xlbvgjmjepq/Pasted%20image%201601392642559.png

Thailand’s non-performing loans amounted to 509 billion baht as of June, a nine-year high of 3.09% of total lending, versus 2.98% at the end of 2019. Loans with a significant increase in credit risk hit 7.48% of lending, up from 2.79% at the end of last year.

Banks prefer keeping distressed assets in house to avoid expensive write-downs, but sometimes see no option but to sell.

For a graphic on Bad loans at Thai banks:

https://fingfx.thomsonreuters.com/gfx/mkt/xlbpgjmlevq/Pasted%20image%201601390972890.png

“We will sell debt of businesses that have no potential,” said Atipat Asawachinda, first senior vice president of Kasikornbank (BK:), which plans to offload 10 billion baht of bad debt this year.

JMT Network Services (BK:), the biggest buyer of distressed consumer loans, will spend a record 6 billion baht buying debt this year, CEO Sutthirak Traichira-aporn said.

“The amount of debt being sold in the market is so great that we don’t have time to choose,” he said, noting it had acquired debt with a face value of 12 billion baht at an average 84% discount in the first half.

JMT’s shares have surged 66% this year.

Sutthirak said relief measures had only delayed the souring of loans, likening them to holding water behind a dam, “If there is too much, it will break out”.





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European Stocks Fall; German Sentiment Weakens as Virus Cases Mount By Investing.com

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© Reuters.

By Peter Nurse 

Investing.com – European stock markets sold off Thursday, as investors fretted about the lack of progress in the talks over a new U.S. stimulus package, fell and the region’s earnings season continued apace.

At 3:40 AM ET (0740 GMT), the in Germany traded 1.1% lower, the in France fell 1%, while the U.K.’s index dropped 0.7%.

Optimism surrounding the potential for a new coronavirus relief package dissipated late Wednesday after President Donald Trump accused Democrats of being unwilling to come to an acceptable compromise over the size of the package. 

Meanwhile, the second wave of European Covid-19 cases is weighing on German consumer confidence, according to market-research group GfK, its forward-looking fell to minus 3.1 points in November from a revised minus 1.7 points in October.

Around three-quarters of consumers currently assume that Covid-19 poses a major or very major threat, and about half are concerned or very concerned about their personal future, GfK said.

Europe has seen Covid-19 cases climb to a record high, with Spain becoming the first Western European country to exceed one million infections and Italy and Germany setting a record increase in daily cases. Despite that, data from the U.K.. another country with sharply rising infections, suggest that improved hospital treatments have significantly reduced mortality rates in the current wave.

In corporate news, IAG (LON:) stock slumped 5% after the airline group, which owns British Airways, reported a 1.3 billion euro loss in the third quarter, adding that it no longer expects to break even in cash flow terms in the fourth quarter as it cut its capacity outlook for the rest of the year.

Unilever (NYSE:) stock fell 0.4% despite the retailer’s third-quarter underlying sales rising thanks to growth in hand and home hygiene products.

It wasn’t all bad news though. Pernod Ricard (PA:) stock rose 1.3% after the French drinks maker said it expects a return to growth in the second half even as sales fell by 6% during the first quarter of fiscal 2021. Luxury goods group Hermes (PA:) also returned to sales growth in the third quarter in constant exchange rates.

Oil prices rebounded slightly Thursday, after suffering heavy losses during the previous session as official gasoline inventories add to worries about the outlook for fuel demand given the surge in Covid-19 cases.

The U.S. Energy Information Administration reported a of 1.895 million barrels in gasoline supply, against the 1.829 million-barrel draw predicted, suggesting U.S. motorists are increasingly choosing to stay home.

futures traded 0.1% higher at $40.06 a barrel, after dropping 4% Wednesday, while the international benchmark contract rose 0.3% to $41.86, after falling more than 3% the previous session.

Elsewhere, fell 0.4% to $1,922.65/oz, while traded flat at 1.1862.

 

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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