Shares of Beyond Meat (BYND) fell on Thursday morning after shares were downgraded at Piper Sandler to the firm's Sell-equivalent rating, saying estimates for the second half of the year may be too optimistic.

ESTIMATES TOO HIGH: Piper Sandler analyst Michael Lavery last night downgraded Beyond Meat to Underweight from Neutral with a price target of $95, down from $120. The company's retail momentum will lag consensus expectations and foodservice consensus estimates "may be high," Lavery tells investors in a research note. “Beyond is an early leader in plant-based meat, but we believe its current all-channel retail momentum lags consensus expectations, and our foodservice estimates may be high, too,” Lavery wrote.

He estimates that the company’s U.S. retail sales fell by about 10% in the third quarter, with multi-outlet with convenience store channel sales down 8% and natural channel sales down 27%. “Beyond’s retail sales declines are worse than all of its food peers in our coverage besides B&G Foods (BGS),” Lavery said. Additionally, in retail plant-based alternative meats, Beyond’s market share fell two percentage points in the latest four weeks, the analyst noted.

The analyst believes Beyond Meat's current retail trends are running below levels needed to support consensus shipment expectations for Q3 and potentially in Q4.

FOODSERVICE SALES: Regarding U.S. foodservice sales, Lavery said it is “difficult” to model sequential sales, and using estimates of sales from new and existing stores suggests his own outlook could be “optimistic.” The analyst's "bottoms-up" build suggests a likely level of U.S. foodservice sales roughly $50M below his estimates over the next four quarters.

PEPSI'S LACK OF MENTION: Beyond has The PLANeT Partnership with PepsiCo (PEP) to develop plant-based protein snacks and beverages, though when PepsiCo just announced its "pep+" initiatives, including portfolio re-shaping with its own push into plant-based protein, the company did not mention Beyond or The PLANeT Partnership joint venture, noted Lavery.

'EROSION' OF U.S. SHARE: Last week, Cowen analyst Brian Holland initiated coverage of Beyond Meat with a Market Perform rating and $124 price target. The analyst thinks ongoing U.S. retail market share and gross margin "erosion" could weigh on the shares. Longer term, however, Beyond Meat's "vast international whitespace" and cost down initiatives could drive both its revenues and profits, Holland wrote. The analyst said that while plant based meat "cooks up a compelling sustainability narrative," there are factors limiting penetration as meat consumption is growing.

PRICE ACTION: In Thursday morning trading, shares of Beyond Meat declined about 5% to $105.17.