Ratings summary and target price
The majority of analysts providing recommendations on Tyson Foods’ (TSN) stock maintain a positive outlook after the fiscal 3Q17 earnings results. Tyson Foods reported strong Q3 results and remains upbeat for the coming quarters. Increased domestic demand and higher exports are likely to drive the company’s top- and bottom-line results. However, increased marketing and advertising costs to support innovation and new product launches, coupled with higher promotional spending, are likely to remain a drag.
Analysts provided a consensus score of 2.3 on Tyson Foods stock on a scale of one for “strong buy” to five for “strong sell.” Moreover, 64% of the 14 analysts covering the stock maintained a “buy,” 29% recommended a “hold,” and 7% have a “sell” rating. As of August 7, TSN stock was trading 6.8% below the analysts’ 12-month target price of $71.42 per share.
Analysts have a neutral outlook on the company’s peers. As for Hormel Foods (HRL), of the ten analysts covering the stock, 40% maintain a “buy” and 60.0% have a “hold” recommendation. Meanwhile, for Pilgrim’s Pride (PPC), 29% recommend a “buy” and 71% of the seven analysts maintain a “hold.” For Sanderson Farms (SAFM), 20% of ten analysts maintain a “buy,” 60% recommend a “hold,” and 20% have a “sell” rating.
As of August 7, TSN stock was trading at as trading at a 12-month forward PE (price-to-earnings) multiple of 13.2x, which is well below the S&P 500 Index’s current forward PE multiple of 18.2x.
However, Tyson Foods’ current valuation multiple is higher than the multiples for Pilgrim’s Pride and Sanderson Farms, which were trading at forward PE ratios of 10.7x and 12.3x, respectively.