Springdale, Arkansas-based Tyson Foods, Inc. (TSN) is a food company that produces, distributes, and markets chicken, beef, and pork, as well as prepared foods. Valued at a market cap of $20.4 billion, the company’s products are marketed and sold primarily by sales staff to grocery retailers, grocery wholesalers, meat distributors, military commissaries, industrial food processing companies, chain restaurants, international export companies, and domestic distributors.
This food processing company’s shares have massively lagged behind the broader market over the past 52 weeks. TSN has gained 3.7% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 22.8%. Moreover, the stock is marginally down on a YTD basis, compared to SPX’s 3.4% rise during the same time frame.
Zooming in further, Tyson Foods’ underperformance becomes more evident when compared to the Consumer Staples Select Sector SPDR Fund’s (XLP) 7.6% return over the past 52 weeks and 1.1% gain on a YTD basis.
TSN's weak performance over the past year has largely been driven by rising cattle costs, elevated inventories, struggles in the beef segment, and intensified competition.
Nonetheless, on Feb. 3, TSN’s shares gained 2.2% as the company delivered stronger-than-expected Q1 earnings of $1.14 per share, which increased 65.2% from the year-ago quarter and revenues of $13.6 billion, which advanced 2.2% year-over-year.
Rising chicken demand from diet-focused consumers benefited the company. Additionally, TSN’s diversified multi-channel, multi-protein portfolio positions it well to capitalize on this growing demand, bolstering investor confidence. Further positives included a 170 bps expansion in adjusted operating margin and a 1.6% year-over-year increase in total volumes, reinforcing its strong performance.
For the current fiscal year, ending in September 2025, analysts expect Tyson Foods’ EPS to grow 22.6% year over year to $3.80. The company’s earnings surprise history is promising. It topped the Wall Street estimates in each of the last four quarters.
Among the nine analysts covering the stock, the consensus rating is a “Moderate Buy,” which is based on two “Strong Buy” and seven “Hold” ratings.
On Feb. 4, Bernstein analysts maintained an “Outperform” rating on TSN and raised its price target to $75- the street-high price target, which indicates a 30.6% potential upside from the current levels.
The mean price target of $64.50 represents a 12.3% upside from Tyson Foods’ current price levels.
