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Beyond Meat Shares Rocket Higher On Partnership With PepsiCo

Beyond Meat Shares Rocket Higher On Partnership With PepsiCo

Plus, Johnson & Johnson delivered an earnings beat, Regeneron said its COVID-19 antibody cocktail appears to be effective as a passive vaccine, and Bed Bath & Beyond got two downgrades this morning.

Stocks were little changed to start Tuesday with the Dow adding 26 points, or 0.1%. The S&P 500 and Nasdaq both traded near the flatline.

Beyond Meat shares surged as much as 38% this morning after it announced it’s teaming up with PepsiCo in a joint venture to create, produce and market snacks and drinks with plant-based substitutes. The partnership offers Beyond Meat to leverage Pepsi’s production and marketing expertise for new products, while Pepsi will deepen its investment in plant-based categories through the joint venture, dubbed PLANeT Partnership LLC. “PepsiCo represents the ideal partner for us in this exciting endeavor, one of global reach and importance,” said Beyond Meat CEO Ethan Brown in a statement. Oppenheimer analyst Rupesh Parikh said of the deal, “This represents another attractive longer-term driver for BYND to capture more share in the expanding plant-based food ecosystem.”

In a busy day for earnings, Johnson & Johnson delivered a beat. The company reported adjusted earnings per share of $1.86 on revenue of $22.48 billion, compared to estimates for earnings of $1.82 per share on revenue of $21.67 billion. “I’m incredibly proud of our Johnson & Johnson teams around the world for going above and beyond to meet stakeholder needs,” said CEO Alex Gorsky. “We continue to progress our COVID-19 vaccine candidate and look forward to sharing details from our Phase 3 study soon.” General Electric delivered mixed results, posting adjusted earnings of $0.08 per share on revenue of $21.93 billion, versus earnings of $0.09 per share and revenue of $21.83 expected. “As 2020 progressed, we significantly improved GE’s profitability and cash performance despite a still-difficult macro environment,” Culp said in a statement. “The fourth quarter marked a strong free cash flow finish to a challenging year, reflecting the results of better operations as well as strong and improving orders in Power and Renewable Energy.” And Raytheon shares are up nearly 3% at the time of writing after the aerospace provider beat its 2020 cash flow guidance, and beat estimates for fourth-quarter earnings reporting per share earnings of $0.74 on revenue of $16.42 billion. “We closed the year on a strong note with fourth quarter sales, EPS and free cash flow exceeding our expectations, as we delivered on our customer commitments and drove strong execution against our cost and cash actions,” said Raytheon CEO Greg Hayes. “As a result, we delivered $2.3 billion in pro forma free cash flow for the year which includes $800 million of discretionary pension contributions.”

On the stimulus front, President Joe Biden said Monday that he expects it could take weeks for Congress to finish talks around a COVID-19 relief deal. “I don’t expect we know we’ll have an agreement… until we get right to the very end of this process, which will probably happen in a couple of weeks,” Biden said. His administration also signaled that it could be open to adjusting eligibility levels for the next round of stimulus checks to ensure the relief flows to families who need the emergency funds the most. Economic advisor Brian Deese said that he has welcomed Republican feedback in recent days and the party’s focus on targeting the next relief plan to those in dire financial straits. “When it comes to the checks, we put forward a proposal that… passed the House with 275 votes – 44 Republicans voted for it,” Deese said, referring to the bill the House approved in December that included $2,000 direct payments as proposed by then-President Donald Trump. “Certainly, if there are ways to make that provision, and other provisions, more effective, that’s something that we’re open to, that we’ll have conversations about.”

Regeneron said today that its antibody cocktail was shown to be effective in preventing COVID-19 in people exposed to those infected with the coronavirus, in interim results from a late-stage study. When used as a passive vaccine, the two-antibody cocktail, REGEN-COV, caused a 100% reduction in symptomatic infection and roughly 50% lower overall rates of infection based on an analysis of about 400 participants. Regeneron said it will discuss the interim results with U.S. health regulators to potentially expand the antibody cocktail’s current emergency use authorization. “These data using REGEN-COV as a passive vaccine suggest that it may both reduce transmission of the virus as well as reduce viral and disease burden in those who still get infected,” said George Yancopoulos, president and chief scientific officer of Regeneron. 

And Bed Bath & Beyond shares are up 3% at the time of writing despite two downgrades this morning. UBS analyst Michael Lasser cut his rating on the home-goods retailer from Neutral to Sell and with a $20 price target, while Raymond James analyst Bobby Griffin cut his rating on the stock from Strong Buy to Market Perform. “To be clear, our change in opinion is not a reflection on Bed Bath & Beyond’s turnaround potential,” Griffin wrote in a note. “We continue to believe that the new management team understands the core issues within the business and has already started to show progress in recent results (gross margin, comps and asset sales).”

Stocks We’re Watching

Vaxart Inc (NASDAQ: VXRT): Vaxart, a clinical-stage biotech developing oral vaccines that are administered by tablet rather than by injection, announced additional results from its SARS-CoV-2 Hamster Challenge Study today. “The latest data from the SARS-CoV-2 Hamster Challenge Study reinforces our belief that our oral COVID-19 vaccine candidate shows great promise.” said Andrei Floroiu, chief executive officer of Vaxart. “Our oral vaccine could help fight the COVID-19 epidemic globally because it is stable at room-temperature making it easier to transport, store, and administer than injectables. It may also appeal to those uncomfortable with injections.”

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