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Tyson Foods: Analysts Recommend a ‘Buy’

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Aug. 18 2020, Updated 10:17 a.m. ET

Improved demand and pricing 

Analysts continue to recommend a “buy” on Tyson Foods (TSN) stock despite current margin compression. Analysts expect continued demand for protein-rich foods, livestock availability, and a sequential improvement in pricing to support the shares.

The demand for chicken and alternative protein is expected to rise due to the African swine flu, which will likely support the pricing. Improved volumes and pricing and share buybacks are expected to support Tyson Foods’ earnings, which declined in the first half of fiscal 2019.

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Rating and target price summary

Among the 16 analysts covering Tyson Foods stock, 11 recommended a “buy,” four recommended a “hold,” and one recommended a “sell.” Analysts have a consensus target price of $79.86 per share on Tyson Foods, which implies an upside of 3.6%. Tyson Foods stock has risen 44.3% in 2019, which indicates that the positives are priced in the stock.

Analysts expect Tyson Foods’ earnings to return to growth in the second half of fiscal 2019 due to a sequential improvement in the pricing, higher volumes, and a favorable mix. However, weakness in the first half of the year is expected to drag the fiscal earnings down, which could limit the upside in the stock.

Analysts also recommended a “buy” on Conagra Brands (CAG) and Mondelēz International (MDLZ). Analysts recommended a “hold” on General Mills (GIS) and J.M. Smucker (SJM) stock.

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