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© Reuters. Barclays cuts Past Meat (BYND) and Tyson Meals (TSN) as ‘the worst is but to return’
By Senad Karaahmetovic
Barclays analysts are rising more and more cautious on protein corporations and declare “the worst is but to return.” The trough for this cycle could not are available 2023, as many predict, however truly, in 2024/2025, they mentioned in a word.
Alongside these traces, the analysts downgraded Tyson Meals (NYSE:) to Underweight from Equal Weight with a worth goal of $58 per share, down from $89. The analysts do not see sufficient rooster upside for TSN, on the similar time when beef is contracting.
The transfer decrease in TSN comes after the U.S. cattle/beef cycle evaluation.
“Shoppers globally are tightening their wallets, and we’re seeing US customers buying and selling all the way down to cheaper beef and rooster cuts, with some South American consumers switching out of those proteins completely into eggs and beans, for instance. Different meats could also be much less interesting for a similar purpose, given affordability points. Whereas inflation headwinds would possibly abate within the medium time period, we’re modeling an additional rise in floor beef costs to ~$6.50/lbs in 2025,” they mentioned in a shopper word.
Alternatively, Past Meat (NASDAQ:) has been downgraded on the again of deteriorating different meat economics. The dearth of visibility additionally prompted the analysts to chop the worth goal to $10 per share, from $13.
“Though the corporate expects to show money circulate constructive by 2H23, we stay skeptical given present money burn charges and a large web lack of over $100mn in 3Q22. Moreover, present market situations create headwinds for BYND, as client commerce downs and rising costs are affecting gross sales – a essential metric for an organization trying to grow to be money circulate constructive within the close to future, and a headwind to raised operational leverage and thus improved pricing,” the analysts added.
Shares of Past Meat and TSN are down 3.3% and a couple of%, respectively, in pre-open Monday.
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