Tyson Foods (NYSE:TSN) - Share price, News & Analysis

Q: What is the Fair Price of TSN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

TSN ($81.75) is trading below our estimate of [[fair value]] ($307.84)

TSN fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	0/6
Past Performance	6/6
Financial Health	5/6
Dividends	5/6

TSN Stock Overview

Tyson Foods, Inc., together with its subsidiaries, operates as a food company worldwide.

Rewards

Trading at 73.4% below our estimate of its fair value

Earnings grew by 73% over the past year

Pays a reliable dividend of 2.25%

Risk Analysis

Earnings are forecast to decline by an average of 3.4% per year for the next 3 years

Tyson Foods Competitors

Hormel Foods

NYSE:HRL

US$27.8b

McCormick

NYSE:MKC

US$24.6b

Kellogg

NYSE:K

US$26.1b

Hershey

NYSE:HSY

US$47.3b

Price History & Performance

Summary of all time highs, changes and price drops for Tyson Foods
Historical stock prices
Current Share Price	US$81.75
52 Week High	US$100.72
52 Week Low	US$74.43
Beta	0.66
1 Month Change	-0.73%
3 Month Change	-4.14%
1 Year Change	2.26%
3 Year Change	-9.10%
5 Year Change	29.25%
Change since IPO	876.12%

Recent News & Updates

Aug 18

The Return Trends At Tyson Foods (NYSE:TSN) Look Promising

Did you know there are some financial metrics that can provide clues of a potential multi-bagger? Firstly, we'll want...

Aug 11

Tyson: Does The 10% Drop Following Q3 Earnings Signal A Buy Or A Sell?

Tyson’s recent results succumbed to macroeconomic headwinds. Some segments suffered large double-digit declines in operating income. While the long-term outlook for the stock appears positive, inflationary pressures could dull results over the short to mid-term. Tyson Foods, Inc. (TSN) is one of the globe's largest food companies and holds a leading position among producers of animal protein products. Tyson released Q3 2022 results last week, and the stock initially fell more than 10%. The poor results were largely caused by the current macroeconomic climate. The tight labor market, mounting input costs, and consumers' response to inflationary pressures are all taking a toll on the stock. Although the quarterly results speak volumes regarding macroeconomic pressures, the numbers do not reveal the trends and initiatives that will likely bode well for investors over the long haul. Everybody Has To Eat, Right? The investing community is deluged of late by articles highlighting recession and inflation-resistant stocks. Of course, one theme points to how companies with business models rooted in necessities will hold their ground despite inflationary pressures. Until we are required to purchase oxygen, food will rank at the top of every person's gotta-buy-list. Therein lies why Tyson was deemed an essential business during the pandemic. So companies that sell food products are inflation resistant. Yes, or no? In my article that debuted the day after Christmas, I warned readers that Tyson's business model should not be expected to perform well during periods of high inflation. Tyson and similar companies are often touted as investments that are inflation proof. However, studies by Morningstar reveal that over the last ten years, Tyson was only able to increase its prices on chicken above prevailing inflation about half the time. The same study indicated that over the last five years, Tyson's price increases lagged inflation by 1.5%. However, management touts the company's ability to maneuver its way through mounting inflationary risks. My opinion is buttressed by a list recently put forth by UBS analysts of the Riskiest defensive stocks as a recession looms. Tyson ranked second among fifteen companies "which may not be as defensive as commonly perceived." While perusing the Q3 results, it is apparent that inflationary pressures present a fierce headwind for the stock. Tyson's Q3 Results: A Window Into Weaknesses Taken at a glance, Tyson's Q3 results might not appear particularly poor. Non-GAAP EPS of $1.94 missed by $0.03, but revenue of $13.5B beat consensus by $250M. Furthermore, organic sales grew 9%. Tyson finished the quarter as the market share leader in the majority of the retail core categories in which it competes, the company's e-commerce sales grew 15% versus last year, and the balance sheet grew stronger. The International/Other segment posted volume increases of 11.7% year-to-date and 21.9% versus the same quarter last year. However, digging a bit deeper, there are ample causes for concern. Adjusted operating income fell 27% year-over-year, and adjusted EPS by 28% from the comparable quarter. Q3 marked the first year-over-year fall in Tyson's adjusted operating margin since the outbreak of COVID-19, and the revenue beat was largely driven by Tyson increasing pricing to meet input costs. While organic sales increased 9%, price/mix accounted for 8% of the growth. Total volume was down for both the quarter and year-to-date. Volumes for Prepared Foods dropped 5.5% year-over-year, Pork volumes were down 2.1% year-to-date, and Beef volumes also fell, although they were up 1.3% over the comparable quarter. Those three segments account for 68% of the company's revenues. However, the loss in volumes only tells half the story. Due to increases in input costs, the adjusted operating income of the Beef segment fell year-over-year by 55% and in Pork by 63%. Look no further than the statements provided during the earnings call for the cause of the poor results. Volumes were down both for the third quarter and year-to-date due to supply constraints and a challenging macroeconomic environment impacting consumer demand. …We saw continued increases in cost of goods across the business, in some instances, up to 15%. Notable examples were labor, feed ingredients, live animals and freight costs. …Global demand is being impacted domestically by high retail prices and internationally by the strong dollar, making U.S. pork relatively expensive as compared to alternative sources globally. Stewart Glendinning, EVP and CFO Management now guides for FY22 volumes to fall .21 billion pounds below FY21 numbers. 2022 volumes relative to FY21 for Beef are expected to drop by 1.5%, for Pork by 2.1%, and by Prepared Foods by 5.5%. Positive Developments And Trends Tyson is largely a US-centric company. However, management is making inroads into foreign markets. Therein lies enormous growth potential tied to a burgeoning global middle class that increasingly consumes quantities of animal proteins. Seeking Alpha/Tyson Presentation The 2018 acquisition of Keystone Foods brought eight production facilities under Tyson's banner in the Asia-Pacific region. In 2019, Tyson took a 40% stake in the Brazilian poultry behemoth Grupo Vibra, a company that serves more than 50 countries. That followed a move earlier that year in which Tyson acquired the Thai and European businesses of BRF S.A. That deal included four production facilities in Thailand, and one each in the Netherlands and the United Kingdom. Roughly a month ago, Tyson acquired stakes in two Saudi Arabian companies, Supreme Foods Processing, and Agriculture Development. Both of the companies are subsidiaries of meat provider Tanmiah Food Company. Supreme Foods deals in pre-cooked chicken and beef products and operates a distribution network across the Middle East. Agriculture Development Company operates hatcheries and feed mills and produces broiler chickens. In FY21, Tyson reported $4.8 billion in U.S. export sales and $2 billion in foreign country revenues. In toto, that represented 14% of the company's sales. The International/Other segment reported an increase in volumes of 11.7% year-to-date and 21.9% versus the same quarter last year. Herein lies a long, broad growth path for TSN. From 2000 through 2018, population growth and a burgeoning middle class led to a 40% increase in global protein consumption. Furthermore, Allied Market Research reported the global animal protein market hauled in over $44 billion in 2019. They forecast a CAGR of 5.4% for the global animal protein market through 2027. Recent trade deals will allow Tyson to increase sales to our nearest neighbors. Canada and Mexico are the first and third-largest export markets for US food and agricultural products. Beginning in 2020, the USMCA trade deal increases chicken exports to Canada to 57,000 metric tons over a six-year period. The agreement also allows for an additional 1% annual increase over the following ten years. Imports of Turkey products will also increase by 1,000 metric tons. This doubles the market access allowed by the previous agreements. Management is also working to lower costs and increase production through a variety of initiatives. Tyson's productivity program is designed to deliver $1 billion in savings by FY24. The program incorporates the widespread use of automation to combat labor shortages and employee retention issues. During the Q3 earnings call, management affirmed that the productivity program is delivering results at the upper range of initial projections. Seeking Alpha/Tyson Presentation

Aug 05

Tyson Foods Q3 2022 Earnings Preview

Tyson Foods (NYSE:TSN) is scheduled to announce Q3 earnings results on Monday, August 8th, before market open. The consensus EPS Estimate is $1.97 (-27.0% Y/Y) and the consensus Revenue Estimate is $13.25B (+6.2% Y/Y). Over the last 2 years, TSN has beaten EPS estimates 100% of the time and has beaten revenue estimates 63% of the time. Over the last 3 months, EPS estimates have seen 9 upward revisions and 2 downward. Revenue estimates have seen 8 upward revisions and 0 downward.

Shareholder Returns

	TSN	US Food	US Market
7D	-0.05%	1.8%	1.4%
1Y	2.3%	7.6%	-8.4%

Return vs Industry: TSN underperformed the US Food industry which returned 7.6% over the past year.

Return vs Market: TSN exceeded the US Market which returned -8.4% over the past year.

Price Volatility

Is TSN's price volatile compared to industry and market?
TSN volatility
TSN Average Weekly Movement	3.6%
Food Industry Average Movement	6.1%
Market Average Movement	7.6%
10% most volatile stocks in US Market	17.1%
10% least volatile stocks in US Market	3.1%

Stable Share Price: TSN is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: TSN's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1935	137,000	Donnie King	https://www.tysonfoods.com

Tyson Foods, Inc., together with its subsidiaries, operates as a food company worldwide. It operates through four segments: Beef, Pork, Chicken, and Prepared Foods. The company processes live fed cattle and live market hogs; fabricates dressed beef and pork carcasses into primal and sub-primal meat cuts, as well as case ready beef and pork, and fully cooked meats; raises and processes chickens into fresh, frozen, and value-added chicken products; and supplies poultry breeding stock; sells specialty products, such as hides and meats.

Tyson Foods Fundamentals Summary

How do Tyson Foods's earnings and revenue compare to its market cap?
TSN fundamental statistics
Market Cap	US$29.40b
Earnings (TTM)	US$4.06b
Revenue (TTM)	US$52.36b

7.3x

P/E Ratio

0.6x

P/S Ratio

Is TSN overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
TSN income statement (TTM)
Revenue	US$52.36b
Cost of Revenue	US$44.18b
Gross Profit	US$8.17b
Other Expenses	US$4.12b
Earnings	US$4.06b

Last Reported Earnings

Jul 02, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	11.28
Gross Margin	15.61%
Net Profit Margin	7.75%
Debt/Equity Ratio	42.7%

How did TSN perform over the long term?

See historical performance and comparison

Dividends

2.2%

Current Dividend Yield

16%

Payout Ratio

Does TSN pay a reliable dividends?

See TSN dividend history and benchmarks

When do you need to buy TSN by to receive an upcoming dividend?
Tyson Foods dividend dates
Ex Dividend Date	Aug 31 2022
Dividend Pay Date	Sep 15 2022
Days until Ex dividend	11 days
Days until Dividend pay date	26 days

Does TSN pay a reliable dividends?

See TSN dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is TSN undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for TSN?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for TSN. This is calculated by dividing TSN's market cap by their current preferred multiple.
What is TSN's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$29.40b

TSN key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.7x
Enterprise Value/EBITDA	5.1x
PEG Ratio	-2.1x

Price to Earnings Ratio vs Peers

How does TSN's PE Ratio compare to its peers?

TSN PE Ratio vs Peers

The above table shows the PE ratio for TSN vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	28x
HRL Hormel Foods	29.1x	8.1%	US$27.8b
MKC McCormick	36x	8.0%	US$24.6b
K Kellogg	17.5x	4.3%	US$26.1b
HSY Hershey	29.3x	4.2%	US$47.3b
TSN Tyson Foods	7.3x	-3.4%	US$29.4b

Price-To-Earnings vs Peers: TSN is good value based on its Price-To-Earnings Ratio (7.3x) compared to the peer average (28x).

Price to Earnings Ratio vs Industry

How does TSN's PE Ratio compare vs other companies in the US Food Industry?

Price-To-Earnings vs Industry: TSN is good value based on its Price-To-Earnings Ratio (7.3x) compared to the US Food industry average (19.1x)

Price to Earnings Ratio vs Fair Ratio

What is TSN's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

TSN PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	7.3x
Fair PE Ratio	20.8x

Price-To-Earnings vs Fair Ratio: TSN is good value based on its Price-To-Earnings Ratio (7.3x) compared to the estimated Fair Price-To-Earnings Ratio (20.8x).

Share Price vs Fair Value

What is the Fair Price of TSN when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: TSN ($81.75) is trading below our estimate of fair value ($307.84)

Significantly Below Fair Value: TSN is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Future Growth

How is Tyson Foods forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-3.4%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: TSN's earnings are forecast to decline over the next 3 years (-3.4% per year).

Earnings vs Market: TSN's earnings are forecast to decline over the next 3 years (-3.4% per year).

High Growth Earnings: TSN's earnings are forecast to decline over the next 3 years.

Revenue vs Market: TSN's revenue (1.3% per year) is forecast to grow slower than the US market (7.8% per year).

High Growth Revenue: TSN's revenue (1.3% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: TSN's Return on Equity is forecast to be low in 3 years time (14%).

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Past Performance

How has Tyson Foods performed over the past 5 years?

Past Performance Score

6/6

Past Performance Score 6/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

9.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: TSN has high quality earnings.

Growing Profit Margin: TSN's current net profit margins (7.7%) are higher than last year (5.1%).

Past Earnings Growth Analysis

Earnings Trend: TSN's earnings have grown by 9.2% per year over the past 5 years.

Accelerating Growth: TSN's earnings growth over the past year (73%) exceeds its 5-year average (9.2% per year).

Earnings vs Industry: TSN earnings growth over the past year (73%) exceeded the Food industry 5.4%.

Return on Equity

High ROE: TSN's Return on Equity (20.9%) is considered high.

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Financial Health

How is Tyson Foods's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: TSN's short term assets ($9.3B) exceed its short term liabilities ($4.7B).

Long Term Liabilities: TSN's short term assets ($9.3B) do not cover its long term liabilities ($12.1B).

Debt to Equity History and Analysis

Debt Level: TSN's net debt to equity ratio (37.3%) is considered satisfactory.

Reducing Debt: TSN's debt to equity ratio has reduced from 106.5% to 42.7% over the past 5 years.

Debt Coverage: TSN's debt is well covered by operating cash flow (36.9%).

Interest Coverage: TSN's interest payments on its debt are well covered by EBIT (16x coverage).

Balance Sheet

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Dividend

What is Tyson Foods's current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

2.25%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: TSN's dividend (2.25%) is higher than the bottom 25% of dividend payers in the US market (1.47%).

High Dividend: TSN's dividend (2.25%) is low compared to the top 25% of dividend payers in the US market (3.97%).

Stability and Growth of Payments

Stable Dividend: TSN's dividends per share have been stable in the past 10 years.

Growing Dividend: TSN's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (16.5%), TSN's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonably low cash payout ratio (47.2%), TSN's dividend payments are well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

2.3yrs

Average management tenure

CEO

Donnie King (60 yo)

1.17yrs

Tenure

US$8,999,444

Compensation

Mr. Donnie D. King serves as President and Chief Executive Officer of Tyson Foods, Inc. since June 2, 2021 and serves as its Director since February 2022. Mr. King served as Chief Operating Officer at Tyso...

CEO Compensation Analysis

Compensation vs Market: Donnie's total compensation ($USD9.00M) is below average for companies of similar size in the US market ($USD12.86M).

Compensation vs Earnings: Donnie's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: TSN's management team is considered experienced (2.3 years average tenure).

Board Members

Experienced Board: TSN's board of directors are considered experienced (5.7 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/19 00:00
End of Day Share Price	2022/08/19 00:00
Earnings	2022/07/02
Annual Earnings	2021/10/02