Bernstein Downgrade Grills Beyond Meat Stock

The shares of Beyond Meat (BYND) are down 3.9% at $184.85 at last check, after Bernstein downgraded the faux meat concern to “underperform” from “market perform.” The firm cited the stock’s recent rally on the charts, saying its valuation has stretched, while also calling out its lack of sales growth and rival Impossible Foods’ increased market share. 

Today’s drop has BYND dipping below newfound support at the $190 level, which caught recent pullbacks as the stock scored a Oct. 8 annual high of $197.50. Nevertheless, the equity is still up 144.1% year-to-date, and the pullback has so far been met with support from BYND’s 10-day moving average. A short-term breather could have already been in the cards, however, as Beyond Meat stock’s 14-day Relative Strength Index (RSI) closed last night at 74, firmly in “overbought” territory.

Today’s downgrade aligns with analysts’ current bearish trend, so there’s plenty of room for upgrades to serve as tailwinds going forward. Coming into today, 13 out of the 17 analysts in coverage sport a “hold” or worse rating on BYND. Plus, the 12-month consensus price target of $126.26 is a 31.6% discount to current levels.

On the other hand, 2.28 calls have been bought for every put in the last 10 weeks at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than 85% of readings from the past year, meaning long calls have been picked up at a faster-than-usual pace in this time period. Given that a whopping 21% of BYND’s total available float is sold short, it’s possible some of these calls could be shorts seeking an options hedge against any additional upside.

Regardless of direction, the good news is that Lastly, the equity’s Schaeffer’s Volatility Scorecard (SVS) ranks at 95 out of a possible 100, implying that BYND has tended to exceed volatility expectations in the past year — a boon for option buyers.

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