Ratings summary and target price
Most analysts covering Tyson Foods (TSN) remain positive on the stock, given the company’s strong start to the current fiscal year. The consensus rating on the stock was 2.3 on a scale of 1.0 for “strong buy” to 5.0 for “strong sell.” About 59.0% of the analysts have recommended a “buy” for the stock, while 33.0% have recommended a “hold,” and 8.0% have rated it a “sell.”
On May 2, 2017, Tyson Foods was trading at $63.87 per share, which is about 9.2% below analysts’ 12-month price target of $69.73.
Tyson Foods is witnessing strong volume growth for its Beef and Pork segments, driven by strong domestic and export demand. Lower live cattle costs are expected to boost the company’s margins in the near term. The company’s focus on portfolio restructuring and strategic acquisitions to expand product offerings further supports sales growth. However, a deflationary pricing environment and increased investments in innovation and marketing are expected to remain a drag.
Hormel Foods (HRL) stock is rated a “buy” by 33.0% of the nine analysts covering the stock. About 67.0% of them have rated it a “hold.” Of the 15 analysts covering Campbell Soup (CPB), 13.0% have rated the stock a “buy,” 54.0% have recommended a “hold,” and 33.0% have rated it a “sell.”
Of the nine analysts covering Sanderson Farms (SAFM), 22.0% have recommended a “buy” for the stock, 56.0% have recommended a “hold,” and 22.0% have rated it a “sell.” For Pilgrim’s Pride (PPC), 29.0% of the analysts have rated the stock a “buy,” while 71.0% have rated it a “hold.”
If you’re looking for exposure to Tyson Foods, you can consider the Consumer Staples Select Sector SPDR ETF (XLP), which invests 1.3% of its portfolio in Tyson Foods.
In the next and final part of this series, we’ll take a look at Tyson Foods’ valuation.