Should I sell Beyond Meat shares after Q4 results?

Beyond Meat, Inc. (NASDAQ: BYND) shares have weakened more than 10% after the company reported fourth-quarter results this Thursday.

Fourth-quarter results and revenue outlook disappointed several banks and research companies, which lowered their price targets on Beyond Meat Shares.

Bank of America lowered its rating

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Beyond Meat reported its fourth-quarter results this week; total revenue has decreased by 1.2% Y/Y to $100.7 million, while the GAAP earnings per share were $1.27 (beats by $1.98).

Adjusted EBITDA was a loss of $62.9 million, and adjusted gross margin fell to 28.5% of revenue during the fourth quarter.

U.S retail segment sales fell by 19.5% to $50.0 million, while the U.S. foodservice segment sales rose approximately 34% and reached $20.6 million. International revenue was up 22.6% to $30.1 million despite the fact that the company had higher logistics costs together with supply chain challenges.

The company’s management expects revenue in the range of $560 million to $620 for the 2022 fiscal year, which represents an increase of 21% to 33% compared to 2021.

Fourth-quarter results and revenue outlook disappointed some analysts, and shares of Beyond Meat nosedived more than 10% in less than several hours. Bank of America lowered its rating and assigned a $45 price target on Beyond Meat shares. Bank of America reported:

Gross margins were negatively impacted by lower revenue per pound, increased trade discounts and increases in per-unit manufacturing costs including logistics, inventory write-offs. Looking to FY22 BYND provided a preliminary sales outlook of $560mm-$620mm (midpoint below our prior $602mm) with a slow expected start to both 1Q sales and gross margins.

Morgan Stanley cut its target to $32 from $54; Piper Sandler lowered its target to $50 from $54, while research company Oppenheimer warned that it is not the right time to buy shares of Beyond Meat.

According to Oppenheimer, competition is hot and Beyond Meat will continue to operate in a challenging and variable macro-environment, affected by labor issues, significantly increased transportation costs, raw ingredients and packaging inflation, and global supply chain challenges.

Technical analysis

Beyond Meat shares have weakened more than 10% after the company reported fourth-quarter results, and the risk of further decline still persists.

If the price falls below $40 support, it would be a “sell” signal, and we have the open way to $35. On the other side, if the price jumps above $50, the next target could be around $55, or even above.

Summary

Beyond Meat shares remain under pressure after the company reported fourth-quarter results this Thursday. Bank of America lowered its rating and assigned a $45 price target on Beyond Meat shares; Morgan Stanley cut its target to $32 from $54, while the research company Oppenheimer warned that it is not the right time to buy shares of Beyond Meat.

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