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Beyond Meat stock surges despite weak financial outlook

Beyond Meat (BYND.US) stock managed to erase heavy pre-market losses and is currently trading nearly 22.0% higher despite the fact that producers of plant-based meat alternatives posted disappointing quarterly results, lowered its annual sales target and announced job cuts due to the impact of inflation. 

  • Company reported wider than expected quarterly loss of $1.53 per, compared to analysts’ estimates of $1.18

  • Revenue fell 1.6% to $147 million, below market expectations of $149.2 million expected.

  • CEO Ethan Brown said on an earnings call that high inflation and more careful spending means consumers are less likely to buy Beyond’s premium plant-based meat. 

  • For the current fiscal year, the firm now expects revenue of $470 million to $520 million, down from its prior forecast of $560 million to $620 million. 

  • Beyond plans to lay off about 4% of its total workforce, or about 40 employees in order to save about $8 million annually.

  • Despite economic conditions and rising competitors, the company is working on improving its products' superiority. Brown said the company is focused on products that taste indistinguishable from meat, and cost the same. The current situation, he said, is reinforcing those maxims, especially toward wringing out any additional costs. 

  • Nevertheless analysts are not too optimistic about the company's prospects. According to FactSet only one of the 19 analysts issued bullish recommendations, while about a quarter rated the company stock at Sell or the equivalent.

Beyond Meat (BYND.US) stock has been moving sideways in recent months, however buyers managed to fend off the bears during today's session and price is approaching the upper limit of the consolidation zone. Should break higher occur, the next major target for buyers is located around the upper limit of the bearish price gap at $65.50 which also coincides with 23.6% Fibonacci retracement of the last downward wave. However, today's upward move may turn out to be a temporary phenomenon and in this case another downward impulse towards recent lows may be launched. Source: xStation5

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