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Beyond Meat has opened its first end-to-end manufacturing facility outside the United States in the Jiaxing Economic & Technological Development Zone (JXEDZ) near Shanghai, China. This facility is expected to significantly increase the scale and speed of production and distribution of the plant-based meat company’s products in China and is also expected to improve the company’s cost structure and “sustainability of operations”.
Shares of Beyond Meat (BYND) were up 3.4% in pre-market trading on Wednesday.
Beyond Meat’s CEO and Founder, Ethan Brown said, “The opening of our dedicated plant-based meat facility in China marks a significant milestone in Beyond Meat’s ability to effectively compete in one of the world’s largest meat markets.”
“We are committed to investing in China as a region for long-term growth, and we believe this new manufacturing facility will be instrumental in advancing our pricing and sustainability metrics as we seek to provide Chinese consumers with delicious plant-based proteins that are good for both people and planet,” Brown added.
The facility will produce a range of plant-based pork, beef and poultry products. Last year, BYND had made its foray into China through a nationwide partnership with Starbucks China. The company also expects to open its first manufacturing facility in Europe this year. (See Beyond Meat stock analysis on TipRanks)
Last week, Oppenheimer analyst Rupesh Parikh reiterated a Hold on the stock. Parikh said in a note to investors, “Consistent with our prior work, we are increasingly cautious on BYND’s retail performance with now much more formidable competition from Impossible Foods and difficult upcoming comparisons. As we illustrate inside, competition in the core burger category is heating up with a larger Impossible Foods presence and competitive prices.”
“For now, BYND still has an advantage given a larger product assortment at retail, but margin risks are growing. We continue to view Street forecasts as aggressive and would tread cautiously from here. To us, the shares remain expensive at ~13x our FY21 sales forecasts,” Parikh added.
The rest of the Street is also sidelined on the stock with a Hold consensus rating. That’s based on 3 analysts suggesting a Buy, 8 analysts recommending a Hold and 4 analysts suggesting a Sell. The average analyst price target of $142.20 implies around 6.2% upside potential to current levels.
According to TipRanks data, financial bloggers are also neutral about the stock compared to a sector average of 54%.
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