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Investing.com - TD Cowen has reduced its price target on Beyond Meat Inc. (NASDAQ:BYND) to $0.80 from $2.00 while maintaining its Sell rating on the stock. The company’s stock, currently trading at $1.04, has already declined nearly 70% over the past year, according to InvestingPro data.
The significant price target cut comes as the plant-based meat alternative company faces what TD Cowen describes as "significant shareholder dilution" resulting from the exchange offer of its convertible notes.
According to the research firm, the transaction reduces Beyond Meat’s debt principal by 83% while simultaneously increasing the company’s share count by 413%.
TD Cowen notes that despite the debt reduction through the convertible note exchange, the company continues to face substantial challenges on both financial and operational fronts.
The firm’s analyst Robert Moskow indicated in his assessment that the company "remains financially and operationally challenged," suggesting ongoing concerns about Beyond Meat’s business outlook despite the debt restructuring.
In other recent news, Beyond Meat has announced an early settlement of its convertible debt exchange offer, aimed at reducing its substantial debt load. Nearly 97% of bondholders agreed to swap their existing 0% Convertible Senior Notes due 2027 for new 7.00% Convertible Senior Secured Second Lien PIK Toggle Notes due 2030 and shares of common stock. This transaction will result in the issuance of approximately $208.7 million in new convertible notes and over 316 million new shares, with completion expected on October 15. Beyond Meat had initially launched an exchange offer for $1.15 billion convertible notes to reduce leverage and extend debt maturity.
In analyst actions, Argus downgraded Beyond Meat from Hold to Sell, citing challenges in the plant-based protein market and declining demand as consumers opt for cheaper protein options. Mizuho reiterated its Underperform rating, noting a 24% decline in 4-week sales and a 25% drop in 12-week sales, with a 26% volume decrease over the most recent 4-week period. Additionally, JPMorgan assumed coverage of Beyond Meat with an Underweight rating, pointing to ongoing market share pressure in a declining demand environment. These developments highlight the company’s ongoing challenges in the market.
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