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McDonald’s Corp. said Thursday that it is expanding its test of McPlant plant-based sandwich to about 600 locations in the San Francisco Bay and Dallas-Ft. Worth areas, starting February 14.
Made with peas, rice and other plant-based ingredients, the sandwich will be available for a limited time and while supplies last.
“McDonald’s USA is expanding the test to select restaurants in your area to help us understand customer demand,” the fast-food giant said in a statement.
The sandwich, co-developed with Beyond Meat Inc.
BYND,
was first launched in eight locations in 2021.
Credit Suisse analysts highlighted the glut of plant-based menu items that restaurant chains have added and announced just a few weeks into the new year: Chipotle Mexican Grill Inc.’s
CMG,
plant-based chorizo; Yum Brands Inc.’s
YUM,
Beyond Fried Chicken at the KFC chain; and Starbucks Corp.
SBUX,
bringing back Meatless Mondays through January.
“Restaurants tend to kick off the New Year with better-for-you platforms, and this year has started off with a spotlight on plant-based menu items,” Credit Suisse said.
McDonald’s
MCD,
is making the McPlant announcement a week ahead of its fourth-quarter earnings, which are scheduled to be released on January 27, according to a FactSet calendar.
“We believe McDonald’s is well positioned to press its key competitive advantages (ie. execution, digital, asset base, marketing) to maintain U.S. momentum, while upside potential still exists in key int’l markets through 2022,” UBS wrote in a note.
“[S]hares should continue to outperform in a choppy & uncertain market given McDonald’s provides inflation protection and defensive attributes. We believe McDonald’s should remain a core long-term holding as a quality compounder set to further increase global market share & accelerate free cash flow growth.”
UBS gave McDonald’s stock a buy rating, with a $297 price target.
Beyond Meat had a long list of troubles that impacted its most recent earnings, but the partnership with McDonald’s was a highlight, said BTIG analysts in November.
Bank of America rated Beyond Meat underperform, with a $55 price objective.
“The key underlying assumption change is that plant-based meat will now only reach a penetration rate of 2.5% of total U.S. meat sales by 2030 (less than 1% penetration in 2021) vs Beyond Meat’s initial projection of a 13% penetration rate, in-line with the plant based milk market,” Bank of America analysts wrote in a January 5 note.
“We believe consumers develop more habitual routines when using plant-based
dairy (creaming coffee, etc.) leading to a higher penetration vs Beyond Meat products which are consumed less frequently. We also outline the potential McPlant opportunity for Beyond Meat in the U.S. which we think could be worth ~$235 million in revenue over time, but likely only ~$30 million of gross profit.”
Beyond Meat is scheduled to release fourth-quarter earnings on March 3, according to the FactSet calendar.
McDonald’s stock has gained 19.1% over the last year. Beyond Meat shares have been halved, down 54.2%, for the period. And the Dow Jones Industrial Average
DJIA,
is up 11.8%.
