Packages of Beyond Meat plant-based burger patties are displayed for a photograph in Tiskilwa, Illinois, April 23, 2019.
Daniel Acker | Bloomberg | Getty Images
Bernstein downgraded shares of Beyond Meat Wednesday on valuation concerns, joining J.P. Morgan as the latest Wall Street analyst this week to cool on the red hot IPO. There are now no analysts on Wall Street that recommend buying Beyond Meat, a rare phenomenon for a company that just went public last month and comes as a result of its monster run outpacing even the must bullish expectations.
“The downgrade is driven by valuation considerations as the stock has traded in a highly volatile manner since its IPO likely due to its limited public float and is now trading at ~31x EV/NTM Sales, implying limited upside potential from a valuation perspective,” wrote Bernstein’s Alexia Howard.
Bernstein goes to market perform from outperform. However the firm upped its price target to $123 from $107. There are now zero “buy” ratings on Beyond Meat and eight “hold” ratings, according to FactSet. No one says “sell.”
Beyond Meat shares dropped 25% to $126.04 on Tuesday after J.P. Morgan, a lead underwriter of the IPO, downgraded the stock. “This downgrade is purely a valuation call,” the J.P. Morgan note stated.
Beyond Meat shares were up more than 600% from its $25 IPO price through their intraday high on Monday before the two downgrades this week, with the rally driven by rising expectations of wider acceptance of the alternative meat and more deals with restaurants. The company on Tuesday released a “meatier” version of its burgers. The shares began trading on May 2nd.
“Despite the valuation considerations, we continue to expect significant growth potential in the plant-based meat category and believe that Beyond Meat is well positioned as one of the frontrunners leading the new wave of plant-based meat products,” Bernstein added.
Shares are up 9% to $137.96 in early market trading.
— With reporting by Michael Bloom
Mnuchin says there’s no deadlines for ‘phase two’ trade deal
Steven Mnuchin, U.S. Treasury secretary, speaks during a press briefing at the White House in Washington, D.C., U.S., on Monday, July 15, 2019.
Al Drago | Bloomberg | Getty Images
There is no deadline for the “phase two” China deal, U.S. Treasury Secretary Steven Mnuchin said while speaking at a CNBC panel during the World Economic in Davos, Switzerland on Wednesday.
“As it relates to phase 2, I would say there’s no deadlines,” Mnuchin told CNBC’s Geoff Cutmore. “So the first issue we’re very focused on the next 30 days is implementing phase 1.”
The secretary added that the deal can be concluded before or after the U.S. election in November, suggesting there was no rush to get it done before the vote.
“There’s also, as part of this, a real implementation office as part of enforcement, and we’ll start on phase 2,” the secretary added. “If we get that done before the election, great — if it takes longer, that’s fine.”
The comment comes just a day after Mnuchin told press that the long-anticipated trade deal may not remove all of the American tariffs imposed on China.
The U.S. and China officially signed the first phase of the trade deal last week in Washington, D.C. after 22 months of tit-for-tat tariffs and negotiations.
This is a breaking news story, please check back later for more.
Trump claims the EU has ‘no choice’ but to agree a new trade deal
The European Union has “no choice” but to negotiate a new trade deal with the U.S., President Donald Trump told CNBC on Wednesday.
The president met with European Commission President Ursula von der Leyen at the World Economic Forum in Davos, Switzerland on Tuesday, and told CNBC’s Joe Kernen that the pair had a “great talk.”
Amid ongoing trade negotiations, Trump has threatened to slap tariffs on European cars in a bid to strong-arm EU leaders. In yesterday’s meeting, he claimed to have told von der Leyen that absent a trade deal, he would need to “take action” in the form of “very high tariffs on their cars and other things.”
Trump said that Europe has been “very tough to deal with” and had “taken advantage” of the U.S., but suggested that the bloc now has “no choice” but to make a deal.
“We’ve had a tremendous deficit for many, many years — over $150 billion with Europe,” he said, adding that he would be “very surprised” if he did have to implement the tariffs.
The U.S. goods and services trade deficit with the EU was $109 billion in 2018, according to the Office of the U.S. Trade Representative.
U.S. exports of Goods and Services to the EU supported an estimated 2.6 million jobs in 2015, the latest available data, according to the U.S. Department of Commerce.
Russia pinning ‘a lot of hopes’ on relationship reset with the US
Russia’s President Vladimir Putin and U.S. President Donald Trump walk during the G20 leaders summit in Osaka, Japan, June 28, 2019.
Kevin Lamarque | Reuters
Despite the awkwardness of President Donald Trump‘s impeachment trial and a dispute over Russia’s mega gas pipeline to Europe that could shut out U.S. natural gas imports, chief executives in the country are hopeful that Moscow and Washington could reset relations this year.
That hope stems from an apparent rapprochement between Russia and its immediate neighbors in Ukraine and Europe, coupled with an increasing weariness among most western nations regarding the continuation of sanctions on Russia for its 2014 annexation of Crimea from Ukraine.
President Vladimir Putin’s announcement of constitutional reforms last week, which many hope will revamp Russia’s economy, have also added to optimism regarding political and economic change in the country.
Russian CEOs told CNBC at the World Economic Forum in Davos that they hoped Putin’s reforms, that hand more power to Russia’s parliament and led to the installation of a new technocrat Prime Minister Mikhail Mishustin, can lead to improvements not only to Russia but to its relations with other global powers, especially the U.S.
“I very much hope that it would also lead to changes in relations (with the U.S.) but the problem is that this is a two-way street,” Herman Gref, the chief executive and chairman of Sberbank, told CNBC Tuesday.
“So it is also about trust, a lot would depend on the U.S. elections. So if the relations between the leaders (of our two countries) are based on mutual trust nothing would stand in the way of such a reset. We pin a lot of hopes on such a reset and businesses need it badly,” he told CNBC in Davos, Switzerland.
Recently, relations have also been strained over Russia’s Nord Stream 2 gas pipeline to Germany. The U.S. sees the pipeline as a way for Russia, already the predominant natural gas supplier to Europe, to cement its control on the region’s energy market. Many see the U.S.’ objections to the pipeline as coming from the fact that it wants to increase its own liquefied natural gas (LNG) exports to Europe, however. Nonetheless, the U.S. president gave the green light to sanctions on the pipeline in December.
Arguing that those kinds of restrictions were “politically motivated” and unhelpful, Kirill Dmitriev, the chief executive of Russia’s $10 billion sovereign wealth fund RDIF, told CNBC that 2020 could still be a good year to reset U.S.-Russia relations.
“We actually believe that this year could be a good year to improve relations with the U.S. Frankly, we can solve lots of anti-terrorism fighting together, we can do lots of things together so, of course, there will be lots of geopolitical and political attacks inside the U.S. but we believe the backdrop is good to improve Russia-U.S. relations this year.”
Dmitriev said there were signs of a rapprochement between Russia and its neighbor Ukraine after several years of frosty relations following Moscow’s annexation of Crimea and its support for a pro-Russian uprising in the east of the country. That action led to a protracted conflict in the region and thousands of deaths and peace talks have only recently re-started between Russia and Ukraine, brokered by France and Germany.
“Europe already has given lots of signs that it wants to reconcile with Russia and we see lots of progress on Ukraine and Mr Zelensky (Ukraine’s president) wants to have some compromises with Russia so we believe that that creates a very positive geopolitical backdrop,” Dmitriev noted.
General optimism was tempered by Andrey Kostin, the chairman and president of Russia’s second-largest lender VTB Bank.
He told CNBC Tuesday that the 2020 U.S. election — and the thorny issue of Trump’s impeachment trial (the president is accused of abuse of power although he denies wrongdoing) — could prevent Putin and the U.S. president from ironing out problems in the relationship.
“I think the big obstacle is the domestic problem in America, because I don’t think Mr Trump can hardly talk to Mr Putin while there’s impeachment (inquiry) in America,” Kostin said. “So we just wait and see.”
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