The Ratings Game: Beyond Meat and McDonald’s haven’t confirmed their work on the McPlant, which one analyst finds ‘extremely strange’

“Furthermore, we find it extremely strange that neither management team is willing to confirm a relationship or intent to work together.”

McDonald’s MCD, +0.09% announced Monday during its investor event that it would begin testing the plant-based McPlant sandwich next year.

Also: McDonald’s to launch its own plant-based burger, the McPlant, after Beyond Meat test

Last year, McDonald’s and Beyond Meat BYND, -3.22% conducted a test of plant-based burgers that ended without further discussion of next steps.

Beyond Meat said in a statement that it “co-created” the McPlant. McDonald’s said suppliers haven’t been announced yet.

“Our relations with McDonald’s is good. It’s really strong. Our work there on behalf of what they’re doing continues,” said Beyond Meat Chief Executive Ethan Brown during the company’s earnings call, according to a FactSet transcript.

“And I really want to defer to our large strategic customers that what they want to share about their supplier base and what they want to share about their launch plans. I don’t want to get ahead and insert ourselves to the point where we’re dominating the headlines at their investor day.”

Also: McDonald’s bringing back the McRib nationwide

Still, Brown said that while he doesn’t know how exactly McDonald’s will proceed with the marketing of the McPlant, “we clearly think it’d be in everybody’s best interest to use our brand, and I would resist efforts not to use it.”

BTIG says McDonald’s didn’t note any changes in the relationship with Beyond Meat, but thinks that the new McRib and chicken sandwich that McDonald’s has planned will push back a McPlant launch.

BTIG rates Beyond Meat stock buy with a $149 price target, down from $173.

“[W]e expect pandemic related headwinds to persist in foodservice and to a lesser extent in retail for several more quarters,” BTIG said. “We continue to believe in the long term trajectory of the plant-based meat category, but expect near term challenges to weigh on results.”

Beyond Meat Inc. shares sank 18.1% in Tuesday trading after earnings fell short of expectations, but UBS upgraded the stock to neutral from sell, saying the long-term view is still “intact.”

UBS lowered its price target to $107 from $110.

See: Beyond Meat stock plummets more than 25% as COVID-19 takes bite out of earnings

“Near-term headwinds are now priced into the stock,” analysts led by Erika Jackson wrote.

Among those headwinds are the rapidly growing field of competition in the plant-based food category. Beyond Meat was also impacted by consumers’ well-stocked freezers.

“As consumers de-loaded their pantries during the quarter, retail growth was not enough to fully offset the foodservice declines as it was during Q2,” analysts said.

Even though the foodservice business has struggled, UBS notes that Beyond Meat added 10,000 distribution points in the third quarter and is working with McDonald’s Corp. on the McPlant, which analysts say could add $150 million in revenue for Beyond Meat.

“We forecast Beyond to grow above end-market demand and maintain leading market share,” UBS said.

Canaccord Genuity analysts expect foodservice headwinds to last through 2021.

“COVID-19 has… pushed out retail launches at large quick-service restaurant chains due to lingering uncertainty,” analysts wrote.

Canaccord rates Beyond Meat stock hold with a $125 price target, down from $140.

Beyond Meat stock has gained 65.4% for the year to date while the S&P 500 index SPX, +1.36% is up 9.7% for the period.