Beyond Meat shares could be worth $130 with broader McDonald's partnership, says Bernstein

In this photo illustration, packages of Beyond Meat "The Beyond Burger" sit on a table, June 13, 2019 in the Brooklyn borough of New York City.
Drew Angerer | Getty Images

Fast food giant McDonald's is the key to unlocking major returns for alternative meat company Beyond Meat, according to A.B. Bernstein.

The firm said if a broader Beyond Meat partnership with McDonald's materializes, the stock could reach between $105 per share and $130 per share, as much as a 35% rally in the stock. Shares of the planet based meat company rose as much as 6% but closed down 2.9% at $81.48 on Wednesday.

"Should McDonald's decide to roll out the [plant, lettuce, tomato] more broadly in Canada and in the U.S., this could present meaningful upside to our sales forecast for Beyond Meat," said A.B. Bernstein analyst Alexia Howard in a note to clients on Wednesday.

McDonald's is currently testing Beyond Meat's plant-based burger in Canada and "initial feedback has been largely positive," said Howard. Shares of Beyond Meat rose more than 12% on Tuesday after Reuters reported alternative meat competitor Impossible Foods is no longer trying to win a deal to supply McDonald's with plant-based burgers. Impossible Foods said it cannot produce enough of its imitation meat to partner with the world's No.1 fast-food chain.

But Beyond Meat has had a volatile ride since its initial public offering in May. The stock rallied from the IPO price of $25 per share to $230 per share in July, before falling to $80 per share following the IPO lock-up expiry.