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On Monday, Bernstein SocGen Group analysts reaffirmed their Outperform rating for Tyson stock (NYSE: TSN) and maintained a price target of $74.00, aligning with broader analyst sentiment as the stock currently trades near its 52-week low at $55.56. According to InvestingPro analysis, Tyson appears undervalued, with 4 analysts recently revising their earnings estimates upward. The decision follows a detailed discussion with Dr. Josh Maples, an Associate Professor of Agricultural Economics at Mississippi State, focusing on the beef industry’s cyclical recovery.
Dr. Maples highlighted a potential slow and rational re-expansion of the beef cattle herd, anticipated to commence in 2026, with 2025 remaining relatively stable. Current high interest rates, ranging from 9% to 12%, pose a challenge for farmers considering herd expansion, compared to the usual 5% to 7% rates. Unlike previous cycles, the current situation shows a limited number of heifers available in feedlots for breeding, which previously facilitated rapid herd growth. Despite these challenges, Tyson maintains strong fundamentals with $53.62 billion in revenue and offers a substantial 3.56% dividend yield, having maintained dividend payments for 51 consecutive years.
The conversation also touched upon potential export challenges due to reciprocal tariffs affecting pork exports to Mexico, potentially impacting chicken and beef prices in the U.S. Additionally, beef exports to China have stalled, presenting further challenges for the industry.
Another concern noted by Dr. Maples is the Northward migration of the New World Screw Worm from Mexico, which has temporarily halted live cattle migration into the U.S. This situation could reduce U.S. feedlot cattle by approximately 5%, contributing to rising live cattle prices and potentially affecting beef processor margins. For deeper insights into Tyson’s financial health and comprehensive analysis of industry challenges, access the full Pro Research Report available on InvestingPro, which covers this and 1,400+ other top US stocks.
In other recent news, Tyson Foods (NYSE:TSN) reported its second-quarter earnings for fiscal year 2025, with an adjusted earnings per share (EPS) of $0.92, surpassing the forecast of $0.84. However, the company’s revenue fell slightly short of expectations at $13.07 billion compared to the anticipated $13.16 billion. Despite the earnings beat, Tyson maintained its full-year guidance, expecting sales to be flat to up 1% and adjusted operating income between $1.9 billion and $2.3 billion. Analysts have adjusted their price targets for Tyson Foods following the earnings report. Bernstein lowered its target to $74 while maintaining an Outperform rating, citing a cautious outlook due to planned investments and economic uncertainties. BofA Securities and JPMorgan both reduced their price targets to $61, with BofA maintaining a Neutral stance and JPMorgan expressing a slightly more positive outlook on the Chicken segment’s earnings potential. Tyson Foods continues to expand its product offerings with the introduction of Wright Brand Premium Sausage Links, planning a nationwide release by fall 2025. The company is investing $100 million in its Chicken segment to support marketing and innovation efforts, despite anticipated margin pressures.
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