Beyond Meat Inc. shares /zigman2/quotes/211617595/composite BYND -0.08% soared another 13% Tuesday, bringing its post-IPO gains to a stunning 240%, after Bernstein initiated coverage of the plant-based meat company's stock with a bullish outperform rating. Analysts led by Alexia Howard set an $81 stock price target, equal to 13 times their fiscal 2020 sales estimate versus the 20 times 2019 sales the stock is currently trading at. "If the alternative meat category develops along a similar path to plant-based beverages (from 5% - 15% of the market around a decade after the almond milk innovation turbocharged the category), then the total addressable market could be ~$40.5 billion in the U.S. within a decade," Howard wrote in a note to clients. If Beyond Meat could secure a 5% share of that market, up from 2% today, it would imply sales of $2 billion in 2028, compared with about $207 million this year. Plant-based foods are more complex to manufacture than plant-based drinks, so the company may retain its competitive "moat" for some time. "That said, Beyond Meat is up against Impossible Foods, which is staking out its turf in the restaurant space before launching into retail later this year, and larger players like Tyson /zigman2/quotes/201117502/composite TSN -0.75% and Nestle /zigman2/quotes/208115528/delayed CH:NESN -0.39% are also looking to enter the U.S. market later this year," said the note. Bernstein is expecting more than one brand to win out, "although clearly staying ahead of peers in terms of taste and texture will be key, and other factors like Beyond Meat's non-GMO status (a claim which Impossible Foods cannot make) could also help." Shares were last trading at $84.91, compared with their IPO price of $25.
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Beyond Meat shares soar anew to bring post-IPO gains to 240%