Bernstein cuts Tyson stock price target to $74, keeps Outperform rating

On Tuesday, Bernstein analysts led by Alexia Howard adjusted the price target for Tyson Foods , Inc. (NYSE: TSN) to $74 from the previous $75 while maintaining an Outperform rating on the shares. Currently trading at $55.82, InvestingPro analysis suggests the stock is undervalued, with analyst targets ranging from $58 to $80. The adjustment follows Tyson’s recent earnings report, which showed a profit surpassing expectations but was coupled with a reiteration of the full-year guidance, reflecting a cautious outlook due to planned investments and an uncertain economic landscape.

The company’s latest financial results indicated a stronger-than-anticipated performance, yet Tyson did not adjust its forward-looking guidance upwards. With revenue of $53.62 billion in the last twelve months and a gross profit margin of 7.87%, management has signaled that additional expenditures in marketing and innovation, particularly within their Chicken segment, are expected to temper results in the second half of the year. InvestingPro data reveals the company maintains strong liquidity with a current ratio of 1.67, suggesting adequate resources for these investments. Despite this, the unchanged guidance might suggest potential for upward revisions later on, especially if the initiatives in product development and marketing prove successful.

Bernstein’s analysis suggests that Tyson’s robust innovation pipeline in Chicken and Prepared Foods justifies the increased marketing spend set to support these initiatives. The firm also finds it positive that Tyson’s guidance factors in the current tariff impacts. However, concerns linger regarding the potential effects of cuts to the Supplemental Nutrition Assistance Program (SNAP) spending on the company’s performance.

The revised price target is based on a lowered EBITDA forecast for the next 12 to 24 months, decreasing from $4,108 million to $4,058 million, while maintaining an 8.5x EBITDA multiple. Current EBITDA stands at $3.49 billion, with the stock trading at an EV/EBITDA multiple of 8.02x. For deeper insights into Tyson’s valuation metrics and growth potential, InvestingPro offers comprehensive analysis in its Pro Research Report, available for over 1,400 US stocks. The guidance from Tyson now anticipates a 28% year-over-year decline in Chicken segment profit for the latter half of the year at the midpoint of their projections.

Investors and stakeholders in Tyson Foods will be monitoring the company’s performance closely, especially in the context of their strategic investments and the broader economic environment that could influence consumer spending and industry dynamics. The company has maintained dividend payments for 51 consecutive years, currently offering a 3.57% yield, demonstrating strong shareholder returns despite market challenges.

In other recent news, Tyson Foods Inc (NYSE:TSN). reported its second-quarter earnings for fiscal year 2025, with an adjusted earnings per share (EPS) of $0.92, surpassing expectations of $0.84. However, revenue fell slightly short at $13.07 billion against the forecasted $13.16 billion. Despite the earnings beat, the company’s stock price faced a decline, attributed to unchanged full-year guidance which disappointed some investors. Both BofA Securities and JPMorgan have revised their price targets for Tyson to $61, maintaining a Neutral stance on the stock. Analysts noted the company’s strong performance in the Chicken segment but expressed concerns over the lack of upward revision in guidance, particularly given the Chicken segment’s significant outperformance. BofA Securities highlighted potential margin pressures in the Chicken segment due to a planned $100 million investment. Meanwhile, JPMorgan remains optimistic about Tyson’s Chicken segment, projecting an EPS of $4.04 for the year, which is above the consensus estimate. Tyson Foods continues to hold steady with its full-year sales guidance, expecting sales to be flat to up 1%.

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