Sceptics and suitors

By Frank Buhagiar on Monday 27 February 2023

Sceptics and suitors
Image source: Sceptics and suitors
CommentaryFoodTech Investment

Food on the Move: FFF’s weekly roundup of listed FoodTech’s movers & shakers

New stock market adage proposed: “As Nasdaq goes, so goes listed FoodTech.”  That’s because, once again, the week ending 24 February 2023 saw the US benchmark set the tone for the FoodTechies.  And it wasn’t a positive one.  Nasdaq finishes down 3.3% on the week.  Cue 37 share price fallers in FFF’s listed FoodTech space, more than four times the week’s nine share price risers (there were also three non-movers).  Tune in next week to find out how the Nasdaq, apologies, how FFF’s listed FoodTech space performs…

Among the nine risers, shares in AppHarvest (APPH) added 15.6% to finish the week at US$1 exactly – clearly Mr. Market has a penchant for round numbers.  The vertical farmer did issue a press release…but only to set a date for its Q4 and full-year 2022 earnings call.  For the record, it’s 9 March 2023. Not enough to explain the share price rise.  What’s more US investment bank Cowen slashed its price target for APPH stock from US$9 to US$2. Ouch.  But then again, a target reset was always on the cards following APPH’s US $40 million raise via the issue of 40 million common shares at US $1 each.  As for the 15.6% rise, well the new target is still double the current share price.   

Fellow vertical farmers Local Bounti (LOCL) and Kalera (KAL) didn’t fare so well – shares were down 19% and 25% respectively.  Just goes to show what a broker target 100% above the current share price can do.    

Elsewhere, Beyond Meat (BYND) released its full year numbers: year on year revenues came in 9.8% lower at US$418.9m; net loss widened by 101% to US$366.1m; loss per share stretched out to US$5.76 compared to US$2.88 loss in FY 2021.  So, how did the share price respond?  By gaining 6.4% to close at US$18.88.  That’s how.  Why? The numbers may have been down on the previous year, but as Reuters reported: “the company…topped expectations for quarterly sales for the first time since June 2021 and forecast annual revenue slightly above estimates.”  According to Reuters: “At least four brokerages lifted their price targets on Beyond Meat’s shares.”

The Reuters article goes on to quote Cowen analyst Brian Holland who said: “We are encouraged by tighter cost management, but for us to become constructive, demand will have to increase – on this we remain skeptical.” Bernstein analyst Alexia Howard added: “This was another cautiously more positive quarter, although the company is by no means out of the woods yet.” Jury’s out, it WOOD seem.

Bad week for the food delivery sector: DoorDash (DASH) -11%; Delivery Hero (DHER) -8%; Ocado (OCDO) -3%; Just Eat Takeaway (TKWY) -8%; Deliveroo (ROO) -11%; and MissFresh (MF) -7%.  Not much in the way of news.  Put the across-the-board weakness down to the Nasdaq then. As always there is an exception that proves the rule.  This time round it was Boxed (BOXD) which managed a 6% rise. The shares had been buoyed the previous week by news that the e-commerce grocery platform, which has been exploring a potential sale of the company, has been speaking with two potential suitors - the promise of a match proving to be more powerful than the pull of the Nasdaq, for now at least…