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Barclays Says 'The Worst Is Yet To Come' For Beyond Meat And Tyson Foods As Inflation Takes A Bite Out Of Profits

Published 28/11/2022, 17:44
Updated 28/11/2022, 19:11
© Reuters.  Barclays Says 'The Worst Is Yet To Come' For Beyond Meat And Tyson Foods As Inflation Takes A Bite Out Of Profits

© Reuters. Barclays Says 'The Worst Is Yet To Come' For Beyond Meat And Tyson Foods As Inflation Takes A Bite Out Of Profits

Benzinga - Barclays (LON:BARC) analysts expect protein sales to be impacted by rising prices for years to come, hence the downgrade of Beyond Meat (NASDAQ:BYND) Inc (NASDAQ: BYND) and Tyson Foods, Inc. (NYSE: TSN) Monday morning.

What Happened: Analysts at Barclays slapped Underweight ratings on Beyond Meat and Tyson Foods and slashed price targets to $10 and $58, respectively.

The firm is becoming increasingly cautious in the sector, claiming "the worst is yet to come" for protein companies, according to several reports.

Beef and chicken prices are expected to continue to trend higher for longer than originally anticipated, which is likely to impact profitability. Although many expect inflation to ease in 2023, Barclays' expects meat economics to continue to deteriorate through 2025.

"Consumers globally are tightening their wallets, and we are seeing U.S. consumers trading down to cheaper beef and chicken cuts, with some South American buyers switching out of these proteins entirely into eggs and beans, for example. Alternative meats may be less appealing for the same reason, given affordability issues," Barclays wrote in a new note to clients.

Beyond Meat doesn't have the same economies of scale as big manufacturers that have been producing products for years. Furthermore, niche products often come with higher costs and higher prices. Tyson Foods has made a push into plant-based meat alternatives in recent years, the analysts noted.

Current market conditions are likely to continue to act as a headwind for the pair of protein companies in the years ahead, Barclays said.

BYND, TSN Price Action: At publication time Monday, Beyond Meat was down 3.14% at $12.32 and Tyson Foods was down 3.06% at $65.27, according to Benzinga Pro.

Photo: Courtesy of Beyond Meat.

Latest Ratings for BYND

DateFirmActionFromTo
Mar 2022Goldman Sachs (NYSE:GS)MaintainsSell
Feb 2022BMO CapitalMaintainsMarket Perform
Feb 2022Canaccord GenuityMaintainsHold
View More Analyst Ratings for BYND

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© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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