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Beyond Meat's stock could fall 50%: Strategist

It seems nothing can stop Beyond Meat’s stock rally (BYND), not even a full-scale attack from meat giant, Tyson Foods (TSN).

Shares of the faux-meat maker jumped nearly 2% Thursday, as investors shrugged off news that Tyson is launching its own line of plant-based protein products. Its chicken-free nuggets and burger patties made with a combination of beef and plants will hit store shelves later this year.

Since going public in early May, Beyond’s stock has soared nearly 470%, giving the profitless company a market value of about $8.5 billion.

“[Plant-based protein] is the future of food,” says Keith Fitz-Gerald, chief investment strategist at Money Map Press.

“Beyond Meat is a very important stock in the history of where we’re going to go as the next billion people come on to the planet,” Fitz-Gerald said on Yahoo Finance’s “The First Trade.”

Still, Fitz-Gerald wouldn’t invest in Beyond Meat right now. He suggests waiting “at least a few quarters” for the company to prove its worthiness to investors.

‘Greed is alive and well’

“The Beyond Meat IPO tells me that greed is alive and well,” Fitz-Gerald said.“I don’t place a lot of faith in companies that aren’t making money.”

Ethan Brown, founder and CEO of Beyond Meat, and guests ring the opening bell to celebrate his company's IPO at the Nasdaq Market site in New York, U.S., May 2, 2019. REUTERS/Brendan McDermid

He said there’s currently more downside risk than upside potential for the stock. “Beyond Meat is up 400% to 500%, which is way beyond where it should have been in the first place if you apply conventional thinking to it,” he said. “But this isn’t a conventional market. So a 25%, 30%, 40%, 50% [selloff] is all possible.”

Not one Wall Street analyst rates Beyond Meat a “buy,” which is unusual for a freshly-minted stock market newbie. JPMorgan Chase and Bernstein each downgraded the stock this week on concerns about its high valuation.

The plant-based protein market is expected to balloon to $12 billion by 2028, according to NYU Stern School of Business Professor Aswath Damodaran.

He said Beyond Meat can capture up to 20% of that market, despite competition from bigger companies including Tyson and Nestle (NESN-SW), which will launch its own plant-based burger this fall.

Alexis Christoforous is co-anchor of Yahoo Finance’s “The First Trade.” Follow her on Twitter @AlexisTVNews.

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