Analysts Have Made A Financial Statement On Tyson Foods, Inc.'s (NYSE:TSN) Second-Quarter Report

Last week, you might have seen that Tyson Foods, Inc. (NYSE:TSN) released its quarterly result to the market. The early response was not positive, with shares down 2.9% to US$58.89 in the past week. It was a credible result overall, with revenues of US$13b and statutory earnings per share of US$0.41 both in line with analyst estimates, showing that Tyson Foods is executing in line with expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Tyson Foods

Following last week's earnings report, Tyson Foods' nine analysts are forecasting 2024 revenues to be US$52.9b, approximately in line with the last 12 months. Tyson Foods is also expected to turn profitable, with statutory earnings of US$1.97 per share. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$53.0b and earnings per share (EPS) of US$1.92 in 2024. So the consensus seems to have become somewhat more optimistic on Tyson Foods' earnings potential following these results.

There's been no major changes to the consensus price target of US$63.50, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Tyson Foods analyst has a price target of US$83.00 per share, while the most pessimistic values it at US$51.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. These estimates imply that revenue is expected to slow, with a forecast annualised decline of 0.007% by the end of 2024. This indicates a significant reduction from annual growth of 6.4% over the last five years. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 2.9% per year. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Tyson Foods is expected to lag the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Tyson Foods' earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Tyson Foods' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$63.50, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for Tyson Foods going out to 2026, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Tyson Foods that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.