On Thursday, Beyond Meat Inc . (NASDAQ:BYND) received an upgrade in its stock rating from Argus. The plant-based meat alternative company, known for its products in retail outlets and collaborations with fast-food chains such as McDonald's (NYSE:MCD), Pizza Hut, and KFC, was previously rated as 'Sell' but has now been shifted to a 'Hold' status.
The firm's decision to upgrade the rating comes amid Beyond Meat's strategic moves to refocus on its profitable core products and cost control measures.
The company has introduced new product versions, including the fourth generation of the Beyond Burger and Beyond Beef, which now feature avocado oil. Additionally, Beyond Meat has decided to discontinue its Beyond Meat Jerky product line following a Global Operations Review to concentrate on more profitable items.
Beyond Meat has also implemented several rounds of layoffs to preserve cash, with the most recent occurring in November 2023, resulting in an 8% reduction in its workforce. These actions are part of a broader initiative by management to navigate through challenges such as decreased demand for plant-based proteins, competition, and shifting consumer perceptions about the health benefits of Beyond Meat's offerings.
Despite the company's efforts to improve margins and earnings growth, the research firm maintains a cautious stance due to the current challenges and opportunities for growth, as well as Beyond Meat's weak balance sheet. The firm indicates that valuations are reasonable, and suggests that a sustained demand recovery and margin improvement could lead to a further rating upgrade in the future.
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