Tyson Foods Delivers Outstanding Q1 Results; Shares Hit All Time High

Tyson Foods, Inc. (NYSE: TSN) delivered outstanding first-quarter results despite the ongoing labor challenges, supply chain constraints, and an inflationary environment. Following the news, shares marked an all-time high of $99.53 and ended the day up 12.3% at $99.09 on February 7.

Tyson Foods is one of the world’s largest food companies and a leader in the chicken, beef, and pork segments. The company beat both earnings and sales expectations by a huge margin backed by the strong demand for all of its offerings. Year-to-date, its shares have gained 12.9%.

Outstanding Results

Tyson Foods reported adjusted earnings of $2.87 per share, up 48% compared to the prior-year period, and significantly surpassed analysts’ estimates of $1.86 per share.

Q1 sales jumped 23.6% year-over-year to $12.93 billion, outpacing Street estimates of $12.09 billion. Sales from Beef, Pork, and Chicken increased year-over-year due to the favorable mix of higher average sales prices, which were driven by higher input costs and volumes. Meanwhile, Prepared Foods segment sales increased marginally due to the divestiture of the company’s pet business in the quarter.

Comments

Delighted with the performance, Tyson Foods President and CEO, Donnie King, said, “Our performance reflects the resilience of our multi-protein portfolio even with continued volatility in the marketplace. We remain committed to winning with our team members, winning with our customers and consumers, and winning with excellence. We have the right team who are taking the right actions and as a result, we believe our future is bright.”

FY22 Outlook

Based on the current business momentum and the United States Department of Agriculture (USDA) guidance of domestic protein production (beef, pork, chicken, and turkey) remaining relatively flat compared to FY21 levels, Tyson Foods gave the following outlook.

For FY22, sales are projected at the upper end of $49 billion to $51 billion, compared to the consensus estimate of $50.35 billion.

Moreover, FY22 capital expenditures are projected at $2 billion, which will be utilized for expansion, automation, and brand and product innovation.  

Price Target

The stock has a Moderate Buy consensus rating based on 4 Buys versus 4 Holds. The average Tyson Foods price target of $91.50 implies 7.7% downside potential to current levels.

Stock Investors

TipRanks’ Stock Investors tool shows that investor sentiment is currently Very Positive on Tyson Foods, with 4.6% of portfolios tracked by TipRanks increasing their exposure to TSN stock over the past 30 days.

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