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Beyond Meat Shares Up 12% On McDonald’s Announcement

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Beyond Meat shares drop amid McDonald’s announcing McPlant Description video: Shares of Beyond Meat fell Tuesday after the company issued disappointing third-quarter results that capped a volatile day for the stock on Wall Street. It all started Monday when McDonald’s […]

Beyond Meat shares drop amid McDonald’s announcing McPlant

Description video:
Shares of Beyond Meat fell Tuesday after the company issued disappointing third-quarter results that capped a volatile day for the stock on Wall Street. It all started Monday when McDonald’s announced new plant-based offerings. Confusion ensued about whether Beyond Meat, which made a meatless patty for a McDonald’s test in Ontario, would be a supplier for the McPlant. CNBC’s \”Squawk on the Street\” crew discusses. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi \n\nShares of Beyond Meat cratered Tuesday in the wake of disappointing third-quarter results that reflected weaker demand for its products at restaurants due to the coronavirus pandemic.\n\nThe stock was down 19% Tuesday morning, erasing more than $1.5 billion in its market value.\n\nBeyond Meat shares slid as much as 28% Monday in after-hours trading, capping off a frenzied day of trading for the volatile stock. McDonald’s announcement of a plant-based line called “McPlant” sparked confusion among investors about whether Beyond would be a supplier for the largest U.S. restaurant chain by sales. The company made the meatless burger patty for a McDonald’s test in Ontario.\n\nThe fast-food giant declined to provide CNBC with any details on its suppliers for the forthcoming products.\n\n“We have a relationship with Beyond Meat, where they supported us in our Canadian test market,” McDonald’s CEO Chris Kempczinski told CNBC’s Carl Quintanilla in an interview that aired Tuesday. “We haven’t made a decision yet about how we’re going to be and which suppliers are supporting our global rollout, so I don’t want to comment on that.”\n\nBut a spokesperson for Beyond said in a statement Monday that the company co-created a meat-free patty with McDonald’s that will be available as part of McPlant.\n\nOn Beyond’s earnings conference call Monday evening, JPMorgan analyst Ken Goldman told Beyond CEO Ethan Brown he thought Brown was “spooking people a little bit” because he wasn’t giving investors any substantial details on what could be a major source of growth for Beyond.\n\nIn a response to Goldman, Brown said that in his own observation, McDonald’s might have wanted to keep the spotlight on its investor day and announcing Beyond as a supplier could have disrupted that focus. He also said he would wait to work with McDonald’s before making further comments on Beyond’s role in McPlant.\n\n“I will say this: Everything we said is true,” Brown said. Beyond has developed a “very long-term” relationship with McDonald’s, including creating the burger that will be a part of McPlant, he said, adding that it is up to the chain to decide the extent of the collaboration.\n\nBTIG analyst Peter Saleh wrote in a note that it’s “extremely strange” that neither management team would confirm that they intend to work together. Still, he said he firmly believes that Beyond will ultimately be a supplier for McPlant, although a meatless McDonald’s burger in the U.S. in 2021 is “unlikely.”\n\nWhile the announcement may have sparked confusion, Beyond received at least one analyst upgrade as a result of the news. Piper Sandler analyst Michael Lavery said the McDonald’s opportunity is big, with or without Beyond’s branding.\n\n“We estimate a potential $100M US opportunity and $150M (or more) globally,” Lavery said in a note to clients Tuesday.\n\n» Subscribe to CNBC TV: https://cnb.cx/SubscribeCNBCtelevision\n» Subscribe to CNBC: https://cnb.cx/SubscribeCNBC\n» Subscribe to CNBC Classic: https://cnb.cx/SubscribeCNBCclassic\n\nTurn to CNBC TV for the latest stock market news and analysis. From market futures to live price updates CNBC is the leader in business news worldwide.\n\nThe News with Shepard Smith is CNBC’s daily news podcast providing deep, non-partisan coverage and perspective on the day’s most important stories. Available to listen by 8:30pm ET / 5:30pm PT daily beginning September 30: https://www.cnbc.com/2020/09/29/the-news-with-shepard-smith-podcast.html?__source=youtube%7Cshepsmith%7Cpodcast \n \nConnect with CNBC News Online\nGet the latest news: http://www.cnbc.com/\nFollow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC\nFollow CNBC News on Facebook: https://cnb.cx/LikeCNBC\nFollow CNBC News on Twitter: https://cnb.cx/FollowCNBC\nFollow CNBC News on Instagram: https://cnb.cx/InstagramCNBC\n\nhttps://www.cnbc.com/select/best-credit-cards/ \n\n#CNBC\n#CNBCTV

Beyond Meat Shares Up 12% on McDonald’s Announcement

McDonald’s announced plans to test a plant-based burger with Beyond Meat cutlets in Canada on Thursday.

12-week test begins September 30 at 28 restaurants in Southwest Ontario.

This item will appear in the menu as P.L.T, which means “plant, lettuce and tomato”. Burger will cost CAD 6.49 ($ 4.90) plus tax surcharge.

«This test will allow us to learn more about the real potential of P.L.T., including customer demand for this product and its impact on workflow in restaurants.», – said Ann Walgren, Vice President of McDonald&# 39; s on global menu strategy.

Beyond Meat shares rose 12% in morning trading, while McDonald’s&# 39; s went up 1%. Since its initial public offering in May, Beyond is up 517%. However, the stock has dropped 34% in the past two months after a secondary share offering, increased competition from Big Food’s competitors and concerns about pricing..

Beyond Meat and Impossible Foods surged in popularity this year as more U.S. restaurant chains such as Dunkin &# 39; and Red Robin add them to their menus. Burger King, owned by Restaurant Brands International, recently released a version of its Whopper, created in collaboration with the Impossible burger, and is available throughout the United States..

Restaurants are choosing plant-based hamburgers as a way to attract consumers looking to cut back on meat. The NPD group found that 95% of people who buy these vegan burgers also bought beef burgers during the past year.

McDonald&# 39; s stayed on the sidelines for now, trying to better understand this trend before actively entering the market as a player. The company already sells plant-based burgers in Germany and Israel in partnership with Nestle, which began selling its Awesome Burger in US stores this week..

Beyond Meat has expressed confidence that it can supply any restaurant chain. In June, CEO Ethan Brown told analysts that the company could supply all major fast food chains if needed..

Beyond Meat Shares Up 12% On McDonald's Announcement