![]() Investors are excited about Beyond Meat because it’s a pioneer in “plant-based meat” (PBM), targeting US meat-eaters for the first time with products that are meant to taste the same as the alternative. McDonald’s has since suggested that the burgers won’t carry the Beyond Meat branding – but as Morningstar’s Scheuneman says, “we think Beyond will be a primary supplier, as it helped to develop the product and few firms have enough capacity”. The “McPlant” is due this year and Beyond Meat’s shares surged in November 2020 when the announcement was made as investors assumed that the meat-free company had sealed a deal with the burger behemoth. While McDonald’s has long had a vegetarian option – we’ve written before on the battle of the fast food giants to keep up with changing consumer tastes – a vegan burger is the long-awaited “game changer” for the food industry. Valuation-wise, a lot hinges on the firm's partnership with wide-moat McDonald’s ( MCD), which Scheueneman says could be worth $180 million in annual sales for Beyond Meat and push its share price to $166. “Given the rapidly changing marketplace, we think it is too early to tell if Beyond’s first-mover advantage will result in a sustained market leadership position,” says Scheuneman. The company doesn’t have an economic moat yet, but is heading in the right direction. ![]() Such a gain often means the shares become quickly overvalued by Morningstar metrics, but analyst Rebecca Scheuneman puts the fair value at $146. Shares are now trading around $140, a mouth-watering return of 460% for those who got in at the IPO. Beyond Meat’s 2019 IPO attracted more than the usual hype, especially as the shares rallied from $25 to nearly $66 on the first day, a 163% gain.
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