Piper Sandler Analyst Michael S. Lavery downgraded Beyond Meat (NASDAQ) shares to Neutral, with a target price of $29.00. That’s down from 50.00.

The analyst is bearish on key fundamentals, while the growing competitive intensity and pessimism around the US McDonald’s Corporation (NYSE:) partnership have also contributed to Lavery moving to Underweight. Investors are reminded that BYND has not yet reached positive EBITDA and is burning cash.

It is committed to keeping prices lower than the price of animal protein by 2024 (despite inflation). This likely causes prices to drop more than it raises volumes. We didn’t expect a nationwide MCD launch to have the same headline effect as we did. Skepticism about its performance in the market likely overshadows news (and an LTO seems more likely than permanent items), Lavery stated in a client letter.

To reflect growth and profitability of the company, the price target was lowered.

Pipers’ survey revealed that 31% said they would buy plant-based protein if it was cheaper than animal.

Beyond’s historical repeat rate of 45% would indicate a 15% increase in volume. Analyst concludes that although we expect an increase in current consumption, it would not compensate for the substantial price drops. This would result in potentially significant net sales losses.

The stock price of Beyond Meat closed Friday at $48.63

By Senad Karaahmetovic