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Mizuho suggested a pair trade in the food and healthy living sector on Thursday. The firm reiterated a bull rating on SunOpta (NASDAQ:STKL) and downgraded Beyond Meat (BYND) to an Underperform rating.
Analyst John Baumgartner and team see multiple opportunities for growth in plant-based sales for SunOpta (STKL). In addition to growing with a diverse range of leading customers in retail and foodservice, STKL’s investments in oat-base extraction are noted to extend the company’s capabilities into refrigerated plant-based beverages and plant-based varieties of ice cream and yogurt. Baumgartner also pointed to an opportunistic entry into protein nutrition and thinks the better-for-you snacking business could provide STKL attractive diversification. Mizuho has a price target of $9 on Buy-rated SunOpta (STKL) to represent upside of more than 300%.
Meanwhile, the firm is not optimistic that Beyond Meat (BYND) can pull off a turnaround. Baumgartner and team are still highly skeptical of market forecasts for total address market and consumption for the company’s key products, especially with macro pressures and a lack of disruptive innovation. While some risk of short covering is seen for the near-term, Mizuho’s price target on BYND of $5 implies eventual downside.
Shares of Beyond Meat (BYND) fell 6.28% in Thursday morning trading and SunOpta (STKL) was down 5.12%.
