Plant-based food maker Beyond Meat Inc (NASDAQ: BYND) continues to mostly benefit from the "young female consumer in the urban environment," BTIG analyst Peter Saleh said Thursday on CNBC's "Trading Nation."
On Tuesday, Saleh initiated coverage of Beyond Meat's stock on Tuesday with a Buy rating and $173 price target. The bulk of his thesis is based on continued momentum from a strong demographic group where repeat purchase rates are as high as 46% in the grocery store channel.
Consumers across coastal cities on both sides of the country are typically trend-starters and the middle of the country is usually "later to adapt," the analyst said. It's a matter of time before Beyond Meat starts to make inroads in the middle of the country.
Why It's Important
Beyond Meat's "really strong demand" makes the case for a greater expansion within the restaurant group, which is in the process of reopening. As it stands today, Beyond Meat's food can be found at 34,000 restaurants in the U.S. which Saleh said implies a penetration rate of just 5%.
Beyond Meat's path to expanding market share in the middle of the country would require a compelling marketing initiative, Saleh said. Fortunately, it already benefits from "free marketing by being on all these menu boards" across the country.
"I think that will help tremendously as they start to grow into the middle of the country," Saleh said.
Beyond Meat's stock closed Thursday's session at $138.11 per share.