Today in the Market (5/12/2022)

Good Evening. Following dramatic fluctuations between gains and losses early in the session, US markets ended the day lower. The sell-off extends a recent losing run fueled by rising inflationary pressures and rekindled concerns that the Federal Reserve’s price-tapping efforts through monetary tightening may be more aggressive than expected, potentially stunting economic development.

The S&P 500 index dropped by 0.13%. The Nasdaq fell by 0.33%, while the Dow finished in the green slightly by 0.06%.

EARNINGS

Beyond Meat Inc. (BYND) stock fell as much as 22% to a new low and was halted by market volatility after Wall Street analysts lowered their price expectations on the plant-based food company following disappointing financial data.

The firm reported a larger-than-expected first-quarter loss and revenue that fell short of projections, prompting a wave of downgrades that drove the stock below its IPO price in 2019.

Here’s what Beyond Meat said in its earnings release: “[G]ross margin in the first quarter of 2022 compared to the year-ago period was also negatively impacted by reduced net revenue per pound due to increased trade discounts, changes in price and sales mix, increased manufacturing costs per pound including depreciation, and higher logistics costs, partially offset by decreased direct materials costs per pound and lower inventory reserves.”

  • Adj. earnings per share: –$1.58 vs. -$1.01 estimate

Mizuho analyst John Baumgartner downgraded the stock’s price target, citing a “striking” gross margin failure, pricing decreases due to competition, and lower demand from new customers as reasons for the downgrade.

At Closing, BYND fell by 4.17%  to $25.08 per share.

IPO

According to Bloomberg News, Instacart Inc., the largest online grocery delivery business in the United States, has filed confidential documents for an initial public offering.

Bloomberg reports that the company is talking with banks such as Goldman Sachs Group Inc. and JPMorgan Chase & Co. on the move, citing people familiar with the matter who say a listing might happen this year, though the timetable could alter.

Instacart’s rapid rise during the epidemic as people switched to online grocery buying has slowed recently as consumers return to in-person store trips.

In March, the firm announced that it was lowering its worth by 40% to $24 billion. Bloomberg reported that Andreessen Horowitz, Sequoia Capital, and D1 Capital Partners. As well as Fidelity Management & Research Co., and T. Rowe Price Associates Inc, valued Instacart at $39 billion in March 2021 investment round.

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