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Goldman Sachs downgrades its rating for Beyond Meat, a technical look at what to expect from the stock

Goldman Sachs downgraded Beyond Meat to “sell” from “neutral.” The firm drastically cut the target price for the stock to $39 from $129. Goldman Sachs thinks that the company will be impacted significantly by foodservice channels shutting down due to the coronavirus outbreak.

In 2019, Beyond Meat’s net revenue grew about 239% to $297.9 million due to strong volumes in the fresh platform across the retail as well as restaurant and foodservice channels. Notably, the retail channel revenue rose 185% to $144.8 million, while the restaurant and foodservice channel revenue grew 312% to $153.1 million.

With a major chunk of Beyond Meat’s revenues relying on the foodservice channel, investors are worried that the coronavirus shutdown might have a fatal impact on the company. Also, the lockdown in other countries will likely impact the company’s international expansion plans.

Technical analysis:

The daily chart shows the formation of a falling wedge. Despite the poor fundamental outlook in the near future, the stock looks like a good buy for a long-term investment at prices between $ 26 and $ 35.

Investors can monitor the daily performance of the RSI oscillator. At a lower stock price than $ 54 on a daily close and a higher RSI of 23, there will be a strong technical buy signal – double bullish divergence.


 Junior Trader Radi Djuma


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