Tyson stock price target lowered to $53 by BMO Capital on margin concerns

Investing.com - BMO Capital has reduced its price target on Tyson Foods (NYSE:TSN) to $53.00 from $58.00 while maintaining a Market Perform rating on the stock. The food products giant, currently trading at $52.1 and near its 52-week low of $51.5, appears undervalued according to InvestingPro Fair Value analysis.

The firm slightly increased its fourth-quarter earnings per share estimate due to chicken price realization lag, though its projection remains modestly below consensus expectations.

BMO Capital has also lowered its fiscal year 2026 earnings per share forecast further below consensus, citing belief that market estimates are overly optimistic for both the Chicken and Beef segments amid margin pressures.

The research firm expects these margin concerns could be highlighted when Tyson provides its fiscal year 2026 guidance in the coming weeks.

Despite the reduced forecast, BMO Capital still assumes Tyson’s Chicken segment will achieve margins of 7.5% in fiscal year 2026, which would represent the second highest margin level in eight years, trailing only fiscal year 2025 performance.

In other recent news, Tyson Foods has seen a significant improvement in its earnings and credit metrics, leading Moody’s to affirm its Baa2 rating and revise the outlook to stable. The company’s adjusted EBITDA increased by 40%, reaching $3.4 billion, which contributed to a notable improvement in its debt/EBITDA ratio. Additionally, Tyson Foods announced plans to eliminate high fructose corn syrup and other additives from its U.S. branded products by 2025, affecting several of its brands, including Jimmy Dean and Hillshire Farm.

JPMorgan has assumed coverage of Tyson Foods with a Neutral rating, setting a price target of $60, while noting challenges in applying a mid-cycle multiple to the company’s future earnings. In a move to strengthen its leadership, Tyson Foods has appointed Sarah Bond, President of Xbox, as a new independent director on its board. Bond brings extensive experience from her role at Microsoft, where she oversees the Xbox organization. These developments reflect Tyson Foods’ ongoing efforts to enhance its financial health and strategic direction.

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