Shares of Beyond Meat (NASDAQ:) exploded yesterday on a report that McDonald’s (NYSE:) will permanently include the McPlant burger in its offering.

However, shares then erased most of the gains to close “only” 7.57% up, after McDonald’s said it has no news to share about the Beyond Meat partnership.

The Bloomberg report cited an executive of McDonald’s who said that the vegan burger was sticking around in the United States and that it would be joined by new Beyond Meat products.

“The McPlant has been part of our global core menu lineup since November 2020 for markets to pull down as they choose to,” a McDonald’s spokesperson stated. “There are no new updates in the U.S.”

The initial report from the fast-food company was later corrected, stating that the McPlant will remain a “core menu item” instead of “permanent”.

McDonald’s introduced the McPlant vegan burger in the U.S. in 2021 before including the item in more locations in February. Many fast food chains are testing vegetarian menu options to attract more people who want to eat less meat.

John Baumgartner, a Mizuho analyst, made the following comment:

“Let’s assume the news is true and eventually McPlant will be adopted nationwide as a permanent item. The launch would contradict industry reports that the expanded test market has not tracked favorably and today’s BYND stock reaction indicates the limited degree to which MCD business is priced into shares. We estimate every 1% share of MCD’s U.S. nationwide beef burger business captured by McPlant may translate into $40MM of annual sales for BYND and, set against FY22E revenue of ~$600MM, the relationship could theoretically prove sizable,” the analyst commented in a note.

Piper Sandler analyst Michael S. Lavery is still bearish about BYND, despite the rumors.

“Even with a permanent launch, we expect a modest (~$20M) lift vs our current LTO expectations. MCD could also decide to bring its production house after it ends the three-year Beyond contract. MCD’s launch is unlikely to boost retail sales due to the lack of MCD branding. Given its weaker balance sheet and cash burn, we remain skeptical about its future prospects.

McDonald’s stock is down nearly 1%.

By Senad Karaahmetovic