Analysts recommend “buy”
Most analysts covering Tyson Foods (TSN) stock recommend “buy.” Barring near-term headwinds, Tyson Foods is expected to benefit from strong demand for protein-rich foods in domestic and export markets, and live cattle and hog availability is expected to support volumes.
Tyson Foods is restructuring its portfolio by divesting non-core non-protein brands and is focusing on cost-saving initiatives to boost its margins and earnings per share. Lower tax is anticipated to cushion its earnings growth rate.
However, near-term weakness in the pork space and margin headwinds stemming from input cost inflation and logistics costs are expected to drag down the company’s performance. Also, supply inefficiency in the chicken business could hurt its financials.
Ratings and target prices
Of the 17 analysts covering Tyson Foods, 59% recommend “buy,” 35% recommend “hold,” and 6% recommend “sell.” Analysts’ price target of $80.44 implies a 19.7% upside based on its May 7 closing price of $67.22.
Morgan Stanley lowered its target price on TSN stock to $74 from $76 following the company’s fiscal 2Q18 release. In comparison, most analysts covering major meat producers Hormel Foods (HRL), Sanderson Farms (SAFM), and Pilgrim’s Pride (PPC) have recommended “hold.”