Beyond Meat, Inc. (BYND) the stock is under pressure following a CBC report that Mcdonald’s Corporation (MCD) has suspended the testing of plant-based burgers in Canada. The downtrend has not yet confirmed or denied by the company. If it is confirmed, the fast-food giant is less likely that the deployment of these products without meat for Americans, the appetites, especially with the pandemic has weighed heavily on the quarterly revenue.
Mcdonald’s currently offers meat-free hamburgers in Finland, Sweden, India, South Africa and Australia. However, a North American deployment requires expenditures and risks, which may not be in the cards right now, because many franchisees are struggling to keep the lights on. Worse still, most of the operations have been leased to franchisees by the parent in an accounting trick that today represents one of the major responsibility for both parties.
Barclay’s lowered Beyond Meat broth to be “Insufficient,” after the Canadian report, the addition of a mixture of Wall Street consensus. The stock is now only two “Buy” ratings from a pool of 12 analysts, with five “Hold” and five “Sell” recommendations by highlighting the main skepticism about the profitability in the coming quarters. Beyond Meat broth is also fully priced according to the analysts, the trading 35% above the median for the $98 price target.
Similarly, the company has diversified revenue streams continue to grow at a healthy pace. As an example, Beyond Meat is trying to build its first European co-production, with the partner Zandbergen in the netherlands, emphasizing the commitment of the growth of the business of the other side of the Atlantic. The pandemic has also supported sales, with a peak of at-home consumption, which may continue well after a return to normal.
Beyond Meat Daily Chart (2019 – 2020)
The stock has been very volatile since coming public at $46 in May 2019, adding excessive risk to the majority of market participants. The momentum players registered after the first impression during this session, the exercise price in the mid$60 by the closing bell. An aggressive purchase bid is continued in July, reaching a high of nearly$ 240. The company then issued a secondary offering, triggering a steep slide that continued until the end of the year.
The decline reached a low in the low $70’s, producing nearly two months of testing before you committed the buyers are back in force in January 2020. The increase, however, was of short duration, ending at $135 only a week later. That marked the top, to the front of a small double top pattern that has broken to the downside in February, when the markets of the world, collapsed as a result of the coronavirus a pandemic.
The decline reached the December low in March, triggering a crash that has found support within two points of the ipo to the opening of print on 19 March. It is the reassembly of the broken support in April, continue to add points to a healthy pace in June, when the bounce has stalled at the .618 retracement of the 2019 2020 a downward trend. The decline in later has now crossed the .50 retracement, which also marks the distribution of support sculpted in the third quarter of 2019.
Beyond Meat-Near-Term Outlook
50 and 200 days exponential moving averages (EMAs) have aligned near Monday’s low at$ 125, predicting that the stock will quickly bounce back, perhaps in response to the clarification of the statements about the Canadian trial. However, the on-balance volume (OBV), the accumulation-distribution indicator is blinking, a minor warning sign after a failed breakout above the May peak. January-the top is the most essential to the action of the price in the third quarter, with a test likely to be conducted at the same time, the stock has reached 200 days EMA support.
Finally, the short-term decline broke a two month trend curve when it crossed the .50 retracement level, has predicted that a rebound will fail between $144 and$ 150. Aggressive short sellers may wish to reload the positions in the area of price because the protective stop can be placed relatively close to the new exhibition. However, there is no guarantee of success, because of this evil in the volatile stock could still reach new heights, the right of the catalysts.
The Bottom Line
Beyond Meat broth is showing signs of technical deterioration after reports that Mcdonald’s may not include plant-based burgers on North American menus.
Disclosure: The author held no positions in the aforementioned securities at the time of publication.