Beyond the meat broth is falling apart. What is behind the movement.

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Actions of

Beyond meat

were down on Wednesday after a Piper Sandler analyst downgraded its rating on the stock amid fears the plant-based meat maker might not be able to meet high expectations. A price drop from rival Impossible Foods also weighed on stocks.

Analyst Michael Lavery downgraded his rating on Beyond Meat (ticker: BYND) to Neutral from Overweight, and his price target to $ 125 from $ 144. While he still believes Beyond Meat will benefit from being an early leader in fake meat – a category that can be worth up to $ 8 billion by 2025 – he believes consensus estimates are currently too high. high and that the company’s fourth quarter sales could disappoint again.

Lavery warns that shipping data to retailers shows Beyond Meat, which reported lower than forecast sales in its third quarter earnings report, could face a similar problem with its fourth quarter numbers, a trend that could persist this year. He believes consensus estimates of income will have to come down.

However, he is less concerned with other aspects of the business.

Sales of

Mcdonalds

(MCD) The McPlant initiative will be an opportunity for Beyond Meat, although historically McDonald’s has rarely highlighted brand partnerships with suppliers. The stock fell during the initial announcement in November because the restaurant giant didn’t say it would use Beyond Meat. Still, Lavery writes that there’s a chance Beyond Meat could get a McDonald’s brand bump. He writes that the partnership is valuable to Beyond Meat anyway, although its “visibility isn’t as powerful as the ‘Impossible Whopper” at Burger King, of course.

Lavery has an eye for increased competition, though he’s not as worried as some bears. He notes that while Beyond Meat and private company Impossible Foods have gained ground, more established players like

Kelloggof

(K) Morningstar Farms, were also able to develop. Indeed, “new entrants can both validate the category with consumers and contribute to greater visibility. We believe that the dynamics can be similar to that of drinks, where

Coke

(KO) and

Pepsi

(PEP) both can benefit from each other’s expenses in the category. This is a theory that other analysts also support.

The competition from Beyond Meat is also not looking to attract more sales. Impossible Foods today announced its second price cut in a year for juice sales. The move – which the company says wouldn’t be the last – prices the Impossible Burger around $ 6.80 a pound, still higher than the $ 2- $ 3 price of beef burgers, but a reduction of 15% from its previous level.

Beyond Meat is down 2.4% to $ 123 in latest trading.

Write to Teresa Rivas at [email protected]