Tyson Foods Posts Excellent Q3 Results; Shares Gain 2.8% Pre-Market

Shares of Arkansas-based food firm Tyson Foods (TSN) jumped 2.8% in pre-market trading on Monday after the company reported excellent financial results for the fiscal third quarter ended July 3. The company owns food brands like State Fair, ibp, Aidells, Wright, Ball Park, Hillshire Farm, Jimmy Dean and Tyson, among others.

Don't Miss our Black Friday Offers:

Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter

Adjusted earnings per share (EPS) stood at $2.70, compared to $1.40 reported in the year-ago quarter. The EPS beat the Street’s estimate of $1.45. Quarterly sales totaled $12.48 billion, up from $10 billion a year ago, exceeding analysts’ expectations of $11.43 billion.

Sales volume of beef rose 24% year-over-year, pork sales volume surged 14.5%, and sales volume of chicken climbed 3.3%. The increases were driven by reduced COVID-19-associated production inefficiencies and strong demand. Prepared foods sales volume grew 4.5% due to sustained retail demand, higher demand in the foodservice channel and lower COVID-19-associated production throughput disruptions.

The President and CEO of Tyson Foods, Donnie King, said, “We have delivered 12 consecutive quarters of share gains in core business lines at retail. Our foodservice volume improved as the restaurant industry began to reopen and recover.”

For Fiscal Year 2021, the company expects sales to total around $46 billion to $47 billion. (See Tyson Foods stock chart on TipRanks)

On July 27, J.P. Morgan analyst Kenneth Goldman reiterated a Hold rating on the stock and raised the price target to $75 from $74.

Ahead of the third-quarter results, the analyst said, “Investor interest in Tyson is not particularly strong at the moment in either direction. Bulls we speak with expect a very strong quarter thanks to beef packing margins and are optimistic that the chicken business is approaching its nadir. Bears seem concerned about the pending supply crunch in cattle, the lack of EPS growth over the last few years, the revolving door of CEOs, and the company’s recent challenges with chicken margins and product recalls.”

Overall, the stock has a Moderate Buy consensus based on 4 Buys and 4 Holds. The average Tyson Foods price target of $82.33 implies 9.9% upside potential. Shares of the company have gained 12% year-to-date.

According to the TipRanks’ Smart Score rating system, Tyson Foods scores a 9 out of 10, suggesting that the stock is likely to outperform market averages.