Investors in Beyond Meat (NASDAQ: BYND) will be hoping that January never ends, while the rest of us desperately try to survive until our paycheck. The plant-based meat company rose 4% on Monday following an expanded partnership with Denny’s (NASDAQ: DENN).
What does the Denny’s deal mean to BYND?
Only last week we asked if Beyond could make Starbucks (NASDAQ: SBUX) its next big client following the coffee-makers announcement that it would be expanding its meatless food offerings. Without even referencing Beyond Meat whatsoever, Starbucks’ announcement sent BYND stock soaring 19% in one day.
Now, Denny’s has announced that it will be expanding its Beyond Burger offering to more than 1,700 locations in the U.S. and Canada, having previously only offered the flagship product in its L.A. stores. The news sent Beyond shares up 9% in mid-day trading before closing at 4%, bringing its total January gains to more than 80%.
Beyond looks set to expand rapidly this year, with a limited McDonald’s (NYSE: MCD) partnership getting an extension in Canada this month, as well as lucrative partnerships with Dunkin Brands (NASDAQ: DNKN), Subway, Del Taco (NASDAQ: TACO), and more.
The company is in an all-out race with rivals Impossible Foods, which recently signed a deal with Habit Restaurants (NASDAQ: HABT). However, it is clear that Beyond has the upper-hand for now.
What about the rest of the market?
Beyond’s gains come amid a broader market drop as companies react to the coronavirus outbreak, with all 3 major U.S. indices down more than 1% yesterday. It is unclear what this means to Beyond Meat’s plans to enter the Chinese market after it joined the China Plant-Based Foods Alliance.
As other stocks continue to fall upon news of the virus’ spread, within the travel industry, Trip.com (NASDAQ: TCOM), Huazhu Group (NASDAQ: HTHT), and Wynn Resorts (NASDAQ: WYNN) are among some of the hardest hit. Elsewhere, the likes of Apple (NASDAQ: AAPL) and Alibaba (NYSE: BABA) have also seen their stocks drop due to virus concerns and their high revenue exposure in China. The Chinese market accounted for nearly 17% of Apple’s total revenue in 2019 alone.
Can BYND stock help the restaurant sector?
Should Beyond continue to announce new partnerships and expansions, it could well prove to be a catalyst for restaurant stocks to rise. However, it is certainly not the only one.
Thanks to new research from Wells Fargo (NYSE: WFC) it was found that the median restaurant stock has outperformed the S&P 500 in election years since 1996. Gains have ranged from 4% in 2016 to 28% in 2000. It was found that quick-service stocks such as Chipotle (NYSE: CMG) have actually outperformed casual dining chains like Brinker International (NYSE: EAT).
It is unclear yet as to why such an occurrence takes place in election years specifically. Perhaps the electorate is too busy mulling over prospective candidates to have time to cook at home.
Either way, I know that writing about these restaurants has made me hungry.
MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in Beyond Meat. Read our full disclosure policy here.
Editor at MyWallSt
Jamie is the Content Editor here at MyWallSt. His favorite stock is Apple, which is also the first stock he ever bought. Jamie is not only a big fan of its products, but he believes that the tech giant has a whole lot more to give the world, and hasn't even scraped the surface of its potential.