Piper Sandler raises Tyson stock rating to Neutral, PT to $58

On Tuesday, Piper Sandler analyst adjusted the rating for Tyson Foods , Inc. (NYSE:TSN) stock, elevating it from Underweight to Neutral and setting a new price target of $58.00. The revision follows Tyson’s release of its first-quarter fiscal year 2025 earnings, which surpassed expectations, particularly due to stronger Chicken segment margins. According to InvestingPro data, the company, with a market capitalization of $20.57B, appears undervalued at its current trading price of $57.74. Notably, 4 analysts have recently revised their earnings estimates upward for the upcoming period.

Tyson Foods, a prominent player in the Food Products industry, has shown a performance that prompted the analyst to reconsider the stock’s valuation, now deemed to be trading around its fair value. The company has also projected positive volume growth for the fiscal year 2025. With annual revenue of $53.61B and a healthy current ratio of 2.11, Tyson demonstrates strong financial fundamentals. The stock offers an attractive dividend yield of 3.46%, with InvestingPro revealing a remarkable 51-year streak of consistent dividend payments.

Despite the positive aspects, the analyst pointed out potential challenges ahead. Increased cattle costs are anticipated, which could impact the company negatively before any improvement is seen. The beef market, which has been favorably priced, may face risks. Furthermore, significant heifer retention has not yet occurred, suggesting that pressure on cattle supply could continue for some time.

Looking ahead, the analyst expects Tyson’s second and third-quarter earnings before interest and taxes (EBIT) for fiscal year 2025 to be robust. However, there is acknowledged uncertainty and risk in the quarters beyond. In light of the recent earnings report, the fiscal year 2025 earnings per share (EPS) estimate has been raised from $3.45 to $3.93. Nevertheless, the forecast for fiscal year 2026 remains unchanged at an EPS of $4.55, along with the maintained price target of $58.00.

In other recent news, Tyson Foods Inc. has seen a series of significant developments. Citi analysts have maintained a Neutral rating on Tyson’s stock, adjusting the price target downwards from $63.00 to $61.00. This adjustment is based on mixed segment performance, with increased profitability expected in the Chicken segment due to favorable pricing and feed savings, but weaker performance anticipated in the Beef division.

UBS has also initiated coverage on Tyson Foods with a Neutral rating and a $62.00 price target, forecasting an approximate 8% compound annual growth rate in adjusted operating income for Tyson between 2024-2028, driven by the Chicken and Prepared Foods segments. However, the firm anticipates potential challenges in the beef segment.

Other analysts have also adjusted their price targets for Tyson, including Piper Sandler, BMO Capital Markets, and Stephens, reflecting strong earnings offset by potential challenges in the beef segment.

Tyson Foods has also announced the permanent closure of its meat plant in Emporia, Kansas, affecting over 800 jobs. This closure is part of a series of operational changes by Tyson Foods, which have resulted in significant workforce reductions. These are the recent developments for Tyson Foods Inc.

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