Ethan Brown, founder and CEO of Beyond Meat, center, rings the opening bell during the company’s IPO at the Nasdaq in New York on May 2, 2019.
Michael Nagle | Bloomberg | Getty Images
J.P. Morgan on Tuesday upgraded alternative meat company Beyond Meat, calling its shares “appealing once again.”
The firm raised its rating to “overweight” from “neutral,” and lifted its target price to $189 a share from $188 a share. J.P. Morgan cited several reasons for its upgrade, including the fact that the stock has dropped 40% since its high on July 26.
“With cash-on-hand likely to exceed $300MM by the end of 3Q, another guidance raise potentially ahead, and the stock ~40% off its high, we think the stock is appealing once again,” J.P. Morgan said in a note to clients.
“We see three primary reasons for renewed optimism: The potential to acquire new food-service customers, continued strength in measured data, and valuation,” J.P. Morgan analyst Ken Goldman said.
The company had also priced a secondary stock offering on July 31, just days after reporting mixed second-quarter earnings.
“We appreciate that the secondary offering spooked many investors; however, founder/CEO Ethan Brown trimmed only a tiny portion of his holdings, and we cannot blame anyone involved pre-IPO for locking in some gains,” Goldman said.
Shares of the company are up 7% to $155.20 in premarket trading.
