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Beyond Meat vs. Kraft Heinz: What to Pick?

As people increasingly move towards a plant-based diet, there is rising adoption of plant-based food products, including meat alternatives. According to a ResearchandMarkets report, the global plant-based meat market is
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As people increasingly move towards a plant-based diet, there is rising adoption of plant-based food products, including meat alternatives.

According to a ResearchandMarkets report, the global plant-based meat market is expected to be worth $13.3 billion this year, compared to $11.9 billion last year, and is expected to grow to $20.78 billion by 2025.

Using the TipRanks Stock Comparison tool, let's compare the plant-based meat company, Beyond Meat (BYND), with The Kraft Heinz Company (KHC), and see how Wall Street analysts feel about these stocks.

I am neutral about both stocks mentioned in the article.

Beyond Meat

Beyond Meat is a plant-based meat provider. Its flagship product is the Beyond Burger. The company distributes its products through retail channels like grocery and convenience stores, and foodservice channels like restaurants.

The company reported mixed second-quarter results, with a wider-than-expected loss and revenue beat. BYND posted Q2 revenues of $149.43 million, a jump of 31.8% year-over-year, outpacing the Street’s estimate of $142.62 million.

Net loss in Q2 widened to $0.31 per share, from a loss of $0.16 per share in the same quarter last year. This net loss per share was higher than analysts’ estimates of a loss of $0.23 per share.

In Q3, BYND anticipates net revenues in the range of $120 million to $140 million, a rise of 27% to 48% year-over-year. The company stated that while it continues to expect a recovery in foodservice channels, the outlook also assumes “reasonable containment of COVID-19 infection rates both in the U.S. and abroad.”

Earlier this month, McDonald’s (MCD) launched the McPlant, a plant-based sandwich in the U.K. and Ireland as part of its three-year strategic agreement with Beyond Meat.

BYND has entered into such strategic agreements with other companies, including PepsiCo (PEP) and Yum! Brands (YUM) in order to reach more consumers through its plant-based meat products. (See Beyond Meat stock charts on TipRanks)

Following the news, BTIG analyst Peter Saleh remained neutral, with a Hold rating, on the stock as he awaits more evidence of widespread adoption of the McPlant. Saleh doesn't expect meaningful revenue contributions from the product.

The analyst added that conversation with the company’s management indicated that while BYND intended for a national rollout of the McPlant range of menu items, it was not guaranteed.

The analyst concluded that while the company has a “strong brand awareness,” and the adoption of plant-based proteins among consumers is rising, there is also “prolonged weakness in the foodservice channel, increased competition, and heightened valuation.”

Turning to the rest of the Street, analysts are cautiously bearish on Beyond Meat, with a Moderate Sell consensus rating, based on five Holds and two Sells.

The average Beyond Meat price target of $108.50 implies 3.9% downside potential from current levels.

The Kraft Heinz Company

Kraft Heinz' product categories include: Condiments and Sauces, Cheese and Dairy, Ambient Foods, Frozen Foods, and Meat and Seafood Products.

Earlier this month, the company had to pay a fine of $62 million to the Securities and Exchange Commission (SEC) to settle charges of “bogus cost savings” worth $200 million.

The company denied any guilt, and commented, “The impact of the 59 transactions at issue in the Order did not affect the Company's reported adjusted EBITDA by more than 1 percent in any reporting period.”

Currently, the company is in the process of divesting some of its assets. Earlier this year, the company entered into an agreement with Hormel Foods (HRL) to sell certain assets in its nuts businesses for $3.4 billion.

Kraft Heinz has also entered into a deal worth $3.3 billion to sell certain assets of its Cheese and Dairy business to Groupe Lactalis, and plans to close the deal in the second half of this year.

In Q2, the company’s net sales declined 0.5% year-over-year to $6.6 billion. However, it beat the consensus estimate of $6.53 billion. (See Kraft-Heinz stock charts on TipRanks)

KHC’s adjusted earnings came in at $0.78 per share, easily outpacing consensus estimates of $0.72, but was down 2.5% compared to the prior-year quarter. The decline was primarily related to a 5.2% fall in adjusted EBITDA, which came in at $1.7 billion.

The company has projected 2021 adjusted EBITDA to come in ahead of 2019 levels. Additionally, the company expects Q3 organic net sales to increase by a mid-single-digit percentage.

Two months ago, Jeffries analyst Robert Dickerson reiterated a Hold rating on the stock, and lowered his price target from $41 to $40 (10% upside) on the stock.

Dickerson is of the view that the company’s margins in the second half of the year will be under pressure from “inflated costs and pricing timing combined with divestment-driven consensus revision risk outstanding for a company that’s lapping elevated food consumption and low promotional activity.”

Wall Street analysts are generally sidelined on the stock, with a Hold rating based on one Buy, six Holds, and one Sell.

The average Kraft Heinz price target of $39.38 implies 8.2% upside potential from current levels.

Bottom Line

While analysts are cautiously bearish about BYND, they are sidelined about Kraft Heinz.

Disclosure: At the time of publication, Shrilekha Pethe did not have a position in any of the securities mentioned in this article​.

Disclaimer: The information contained in this article represents the views and opinion of the writer only, and not the views or opinion of TipRanks or its affiliates, and should be considered for informational purposes only. TipRanks makes no warranties about the completeness, accuracy or reliability of such information. Nothing in this article should be taken as a recommendation or solicitation to purchase or sell securities. Nothing in the article constitutes legal, professional, investment and/or financial advice and/or takes into account the specific needs and/or requirements of an individual, nor does any information in the article constitute a comprehensive or complete statement of the matters or subject discussed therein. TipRanks and its affiliates disclaim all liability or responsibility with respect to the content of the article, and any action taken upon the information in the article is at your own and sole risk. The link to this article does not constitute an endorsement or recommendation by TipRanks or its affiliates. Past performance is not indicative of future results, prices or performance.

The post Beyond Meat vs. Kraft Heinz: What to Pick? appeared first on TipRanks Financial Blog.

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Government

When Will Royal Caribbean, Carnival, Norwegian Drop Vaccines, Testing?

One of the big three cruise lines just extended its covid-related protocols in the United States until the end of September.

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One of the big three cruise lines just extended its covid-related protocols in the United States until the end of September.

The cruise industry got hit by a perfect storm when the covid pandemic hit. 

For an industry vulnerable to storms in general, it was a terrible combination of events that left the industry shuttered, while hotels, theme parks, arenas, and other venues all remained closed for much less time.

That's because the United States government only has limited control over how private industry operates. 

A local municipality may shutdown industries like the way New York closed Broadway or California shut down its theme parks — but the federal government only has limited power for certain things.

When it comes to cruise lines, however, the federal government has an incredible amount of power. 

That's because all the major cruise lines including Royal Caribbean (RCL) - Get Royal Caribbean Group Report, Carnival Cruise Lines (CCL) - Get Carnival Corporation Report, and Norwegian Cruise Line (NCLH) - Get Norwegian Cruise Line Holdings Ltd. Report flag their ships outside the U.S. 

That allows the Centers for Disease Control (CDC) to regulate how the cruise lines operate.

During the pandemic the CDC made an example of the cruise industry, It shut down cruising from North American between March 2020 and July 2021, ignoring the industry's extensive efforts to show it could operate safely. 

Eventually the CDC relented, allowing limited-capacity sailings with a lot of rules beginning in early July 2021.

Now, most of those protocols have gone away as the CDC has lost its leverage with the rest of the country returning to pre-pandemic operating standards. 

The cruise lines, however, still have certain rules in place and two key ones aren't going anywhere any time soon.

Dukas/Universal Images Group via Getty Images

What Are Cruise Covid Protocols Like Now?

Royal Caribbean recently told its booked passengers that it plans to keep its current covid protocols in place through the end of September. 

Currently, Carnival, Norwegian, and Royal Caribbean all have similar Covid-19 rules

They require:

  • All passengers 12 and over must be fully vaccinated at least two weeks before sailing.
  • A vaccine card — not a digital copy — must be shown before boarding.
  • All passengers must present a negative Covid test (which must be a proctored test) taken no more than two days before their cruise. 

All three cruise lines have made masks optional while onboard. 

In addition, Royal Caribbean, Carnival, and Norwegian all operate with a fully-vaccinated crew and have procedures designed to handle when passengers or crew members show Covid symptoms during a sailing.

When Will Cruise Lines Drop Vaccine and Testing Requirements?

Many passengers and future passengers want to know how long these protocols will be in place. 

Some people who are not vaccinated want to return to cruising, while others who are vaccinated simply don't want the added hassle of proving it.

The cruise lines, of course, must balance people wanting a return to normal with other passengers who like sailing with fully-vaccinated passengers who have also recently tested negative.

Currently, Carnival, Royal Caribbean, and Norwegian all participate in a voluntary safe sailing program led by the CDC which sets testing and vaccination standards.

It's possible the CDC changes these requirements, but probably not any time soon, according to former Food and Drug Administration chief Scott Gottlieb, a physician who serves as chairman of Norwegian Cruise Line Holdings’ SailSafe Council.

 “I think that it’s likely to be a requirement that is in place through this fall and winter,” Gottlieb said. 

“I’m talking more about CDC and the policy environment. I think that the public health officials, CDC, is going to want to see what the epidemiology of this disease is when it gets to a quote, unquote, ‘normal’ state."

Gottlieb said he does not expect the CDC to make any changes until it sees a period of time where no new variants flare up. 

He said he thinks the federal agency will wait until 2023 and not even first thing next year.

“The short answer to the question is: I think this is kind of a springtime thing from a CDC policy standpoint," he said. 

"They are going to want to make a decision around this after we get through another fall and winter with covid and see if we are truly in an endemic phase with this.”

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Swiss Watch Shortage Spreads From Rolex To Cartier And Tudor

Swiss Watch Shortage Spreads From Rolex To Cartier And Tudor

A top retailer of Swiss luxury watches warns robust demand and the lack of supply…

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Swiss Watch Shortage Spreads From Rolex To Cartier And Tudor

A top retailer of Swiss luxury watches warns robust demand and the lack of supply have sparked a perfect storm of global Rolex shortages that has spread to other leading brands, including Cartier and Tudor. 

CEO Hugh Brian Duffy of Watches of Switzerland Group Plc, with a network of 171 retail stores between the UK and the US, told Bloomberg on Thursday morning that sales of Rolex, Patek Philippe, and Audemars Piguet had only "modest" increases in the retailer's 2022 fiscal year, primarily because of limited supply. He said this drove demand for other high-end brands. 

"We more than doubled our increases with them," Duffy said, citing Rolex sister brand Tudor, independent Breitling, LVMH's Tag Heuer, Swatch Group's Omega, and Richemont's Cartier. 

He said the Rolex shortage had increased so much demand for certain Cartier and Tudor models, that now those are experiencing supply issues. 

"We can't get enough Santos," he said, referring to the Cartier aviator watch, adding Tudor's chronograph models are in short supply.

Sales of Swiss watches went through the roof during the pandemic as classic high-end timepieces were in high demand as central banks worldwide pumped trillions of dollars into the financial system. Hot money had to end up somewhere, and some wound up in Rolexes and other luxury Swiss brands. 

Duffy concluded the interview by saying retail demand for Rolex, Patek Philippe, and Audemars Piguet watches outweighs supply: "Demand is just off the scale for those brands. We would love to have more of them." 

And when does this Swiss watch bubble end? Will it be when central banks spark the next global recession from aggressive monetary tightening? 

Tyler Durden Sat, 05/21/2022 - 08:45

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Let Them Eat Bugs… How Out-Of-Touch Elites Reveal Their Contempt, & What Comes Next

Let Them Eat Bugs… How Out-Of-Touch Elites Reveal Their Contempt, & What Comes Next

Authored by Nick Giambruno via InternationalMan.com,

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Let Them Eat Bugs... How Out-Of-Touch Elites Reveal Their Contempt, & What Comes Next

Authored by Nick Giambruno via InternationalMan.com,

Upon being told that the people had no bread, Marie Antoinette reportedly responded, “let them eat cake.”

These infamous words were a stark illustration of the French elite’s careless indifference to the plight of ordinary people. Moreover, they likely fueled the anger that sparked a revolution that overturned the French ruling system.

Had Marie Antoinette not been so out of touch, she might have had a better choice of words.

Although history doesn’t repeat itself, it does rhyme.

I am bringing this up because recently, modern political, financial, and media elites have made numerous “let them eat cake” remarks.

They similarly reveal how oblivious they are to the average person’s problems as inflation spirals out of control, shortages spread, the stock market crashes, and economic prospects look dimmer by the day.

Let’s look at them and examine what they could mean for the social and political environment in the future… and what you can do about it.

Example #1: Inflation Is Good

First central bankers, the mainstream media, and academia tell you there is no inflation.

Then, when inflation becomes undeniable, they tell you not to worry because inflation is only “transitory.”

Then, when it becomes apparent that it’s not merely transitory, they tell you not to worry because inflation is actually a good thing.

It’s not uncommon to see ridiculous headlines like this:

Example #2: No More Turkey at Thanksgiving

After inflation broke through multi-decade highs, it’s no longer possible to maintain the farce that “inflation is good.”

So the elite’s messaging has pivoted to ways the plebs can cope with ever-decreasing living standards.

Last Thanksgiving, it was impossible for the Federal Reserve to ignore the soaring costs of turkey. So, instead, the St. Louis branch had a helpful suggestion for those struggling—substitute delicious turkey for cheaper heavily-processed industrial sludge.

Example #3: Let Your Pets Die

Recently, Bloomberg published an article titled “Inflation Stings Most If You Earn Less Than $300K. Here’s How to Deal.”

It recommended rethinking providing medical treatment to your pets:

“If you’re one of the many Americans who became a new pet owner during the pandemic, you might want to rethink those costly pet medical needs.”

Example #4: Gas Is Too Expensive? Buy a Tesla

As gas prices skyrocket, transportation Secretary Pete Buttigieg suggests buying an electric vehicle. That way, the plebs can stop complaining and will “never have to worry about gas prices again.”

The thought of whether people could afford an expensive electric vehicle in the first place didn’t seem to cross his mind.

Example #5: Housing Is Too Expensive? Live in a Pod or Move Back In With Your Parents

With soaring prices making housing unaffordable in many big cities, living in pods is promoted.

For example, in California, a three-bedroom home that used to house a single family has been converted into a unit that includes pods for 13 people.

Similar stories are sprouting up across other cities. The media is celebrating this not as a significant downgrade but rather as an eco-friendly solution to rising housing costs.

They also recommend moving back in with your parents.

Example #6: Meat Is Too Expensive? Eat Bugs and Industrial Sludge

With inflation making meat unaffordable for many, the elite are looking to keep the plebs happy by guilting them into thinking that meat is bad for the environment.

That’s a big reason why there’s been a flurry of articles in the mainstream media condemning meat consumption and promoting cheap alternatives.

Their solution is to give the plebs fake meat made of heavily-processed industrial sludge and feed them bugs.

Bill Gates recently said: “I think all rich countries should move to 100% synthetic beef.”

“You can’t have cows anymore,” and governments can “use regulation to totally shift the demand.”

An article in The Economist notes: “We’re not going to convince Europeans and Americans to go out in big numbers and start eating insects… The trick might be to slip them into the food chain on the quiet.”

The Guardian tells us eating bugs can assuage your climate sins and that “if we want to save the planet, the future of food is insects.”

Here’s Bloomberg:

These are a couple of examples of a much broader push against meat.

Here’s the bottom line.

The elite have been informed that meat is becoming too expensive for the average person. Their answer: “Let them eat bugs.”

Conclusion

This overview is by no means a complete collection of recent “let them eat cake” statements. However, it is enough to understand what the elites think and their contempt for the average person.

These are the same people who engaged in—or closely benefited from—the rampant money printing and other policies responsible for the rising prices ravaging regular people in the first place.

And when the pain of inflation became apparent, their response has been… inflation is good… no more turkey at Thanksgiving… let your pets die… buy an expensive electric vehicle… live in a pod or move back in with your parents… and eat bugs.

Instead of looking at these examples separately, take a step back and reflect on the Big Picture they paint. That will help us better understand the social and political situation, where things might be headed, and what we should do.

With that in mind, two things seem clear.

1) The current crop of political, financial, and media elites are ensconced in a bubble, carelessly indifferent to the problems of ordinary people—much like Marie Antoinette was.

2) Anger is building up as people feel increased economic pain.

Nobody knows how the situation will resolve itself, but I think it would be foolish not to prepare yourself—and your portfolio—for turbulence in the months ahead.

*  *  *

The economic trajectory is troubling. Unfortunately, there’s little any individual can practically do to change the course of these trends in motion. The best you can and should do is to stay informed so that you can protect yourself in the best way possible, and even profit from the situation. That’s precisely why bestselling author Doug Casey and his colleagues just released an urgent new PDF report that explains what could come next and what you can do about it. Click here to download it now.

Tyler Durden Sat, 05/21/2022 - 08:10

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