The price for a share of Beyond Meat almost tripled on the first day of trading in May and that was just a taste of what was to come.
By the end of the day Monday, the stock had gained an additional 30 per cent. But on Tuesday, Wall Street got a case of heartburn after two analysts from J.P. Morgan - a lead underwriter of its initial public offering - sounded the alarm, saying the company's valuation had grown too big too fast. By midday, the stock slumped 22 per cent, its biggest one-day sell off to date.
It is that pace that brought a downgrade to 'neutral' from J.P. Morgan's Ken Goldman and James Allen. The downgrade from J.P. Morgan comes just days after it upped its price target Friday by $23, to $120.In a note to clients Tuesday, Goldman and Allen said the downgrade was "purely a valuation call." They referenced a note from last week in which they said revenue and profit potential in Beyond Meat's shares would eventually be priced in, adding, "we think this day has arrived.
Still, Beyond Meat has never made an annual profit, losing $30 million last year. It's also facing increasing competition from other "new meat" companies like Impossible Foods. Traditional players like Tyson Foods Inc. are also entering the fray.
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