Investors in Tyson Foods, Inc. (NYSE:TSN) had a good week, as its shares rose 4.3% to close at US$63.45 following the release of its annual results. It looks like a credible result overall - although revenues of US$43b were in line with what the analysts predicted, Tyson Foods surprised by delivering a statutory profit of US$5.86 per share, a notable 13% above expectations. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.
Taking into account the latest results, Tyson Foods' eleven analysts currently expect revenues in 2021 to be US$43.6b, approximately in line with the last 12 months. Statutory earnings per share are expected to decrease 5.1% to US$5.59 in the same period. Before this earnings report, the analysts had been forecasting revenues of US$44.1b and earnings per share (EPS) of US$5.84 in 2021. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
It might be a surprise to learn that the consensus price target was broadly unchanged at US$76.42, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Tyson Foods at US$87.00 per share, while the most bearish prices it at US$64.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Tyson Foods' revenue growth will slow down substantially, with revenues next year expected to grow 1.1%, compared to a historical growth rate of 2.6% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.0% per year. Factoring in the forecast slowdown in growth, it seems obvious that Tyson Foods is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at US$76.42, with the latest estimates not enough to have an impact on their price targets.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Tyson Foods going out to 2023, and you can see them free on our platform here..
Plus, you should also learn about the 1 warning sign we've spotted with Tyson Foods .
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This article by Simply Wall St is general in nature. 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.
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