On Tuesday, Barclays (LON:BARC) reaffirmed its Overweight rating on Tyson Foods , Inc. (NYSE:NYSE:TSN) shares, maintaining a $76.00 price target. The firm's stance reflects Tyson's robust performance in its fourth fiscal quarter of 2024 and the expectation of continued growth into the 2025 fiscal year. The analyst from Barclays highlighted Tyson's Chicken operations as a key driver for the company's growth, despite increased marketing expenditures.
Tyson Foods has reported results that surpassed expectations for its fourth fiscal quarter of 2024, and the company is looking to sustain this positive trajectory into FY25. With a focus on disciplined cash use and margin improvements across various segments, except for Beef due to current market challenges, management is optimistic about the future. A new advertising initiative is also anticipated to bolster market growth in the Prepared Foods sector.
The company has provided guidance for FY25, projecting approximately flat sales and an adjusted operating income growth of around 10% at the midpoint, primarily fueled by its Chicken and Prepared Foods segments. While this guidance is solid, Barclays considers it to be on the conservative side, suggesting there is room for Tyson to outperform these expectations.
Barclays slightly reduced its adjusted operating income forecast for Tyson in 2025 due to the anticipated $100 million investment in advertising and marketing. Nonetheless, the firm's projections remain higher than Tyson's guidance, particularly for the Chicken segment. The analyst believes that Tyson's strong market position and operational efficiencies will lead to significant profitability gains in the Chicken sector, with the potential for the Prepared Foods segment to exceed expectations due to market share gains from the new advertising campaign.
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