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Investing.com - Bernstein downgraded Tyson Foods (NYSE:TSN) from Outperform to Market Perform on Wednesday, while reducing its price target to $59.00 from $74.00. The stock, currently trading at $54.47, sits near its 52-week low of $52.71, though InvestingPro analysis suggests the company is undervalued at current levels.
The downgrade comes as Bernstein analyst Alexia Howard cited persistent challenges in cattle supply that continue to pressure Tyson’s beef business. According to the firm, heifer slaughter rates have remained elevated above levels necessary for herd rebuilding since last quarter. This pressure is reflected in Tyson’s weak gross profit margin of 7.87%, as identified by InvestingPro analysis.
Bernstein expects Tyson’s beef business to remain unprofitable in the near term, noting that even if heifer slaughter rates decline, the domestic cattle supply will remain constrained as herd rebuilding naturally takes years.
The firm also highlighted emerging threats to the beef supply chain, including the potential spread of New World screwworms, which haven’t been seen in the U.S. for approximately six decades and previously required years of international cooperation to eradicate.
Additional supply challenges include the current suspension of Mexican cattle imports and the Trump administration’s focus on Australian cattle imports as an example of an alleged trade imbalance, further complicating Tyson’s outlook.
In other recent news, Tyson Foods has been the focus of several significant developments. Goldman Sachs initiated coverage on Tyson with a buy rating, highlighting the company’s diversified business model as a strength that could reduce earnings volatility, and set a price target of $67.00. Meanwhile, Piper Sandler maintained a Neutral rating, adjusting its fiscal 2025 earnings per share estimate slightly downward to $3.72, while keeping the 2026 estimate at $4.45. Bernstein SocGen Group reiterated their Outperform rating, maintaining a price target of $74.00, following discussions about the beef industry’s cyclical recovery.
Additionally, Tyson Foods has expanded its product line with the introduction of Wright Brand Premium Sausage Links, offering flavors such as Applewood, White Cheddar & Bacon, and Bacon, Cheddar & Jalapeño. This expansion caters to consumer demand for high-quality smoked meats. In a positive trade development, several U.S. pork and poultry plants have regained export access to China, a move that could benefit Tyson Foods indirectly. These facilities have been approved to export products produced on or after June 12, following recent U.S.-China trade talks.
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