On Wednesday, Citi updated its stance on Tyson Foods , Inc. (NYSE:TSN), reducing the price target to $60.00 from the previous $63.00, while reiterating a Neutral rating on the stock. The adjustment comes ahead of the company's expected fiscal fourth-quarter earnings report, which is scheduled for release on November 11, 2024.
Citi's analysis indicates that Tyson Foods may outperform the Visible Alpha consensus by $0.10 in earnings per share (EPS) for the fourth quarter of fiscal year 2024. The firm, however, projects a full-year fiscal 2025 EPS that is $0.21 below the consensus, attributing the lower forecast to a combination of decreased operating profit and items below the line.
Despite the lowered price target and forecast for fiscal year 2025, Citi does not anticipate a negative surprise in Tyson Foods' initial operating profit guidance for the year. According to Citi's analyst, the guidance is expected to cover a broad range of outcomes, suggesting that the market should be prepared for various scenarios.
Tyson Foods, a major player in the food industry, is closely watched by investors for signs of performance in the sector. The company's upcoming earnings report will provide further insights into its financial health and its ability to navigate the current economic environment.
Investors and market watchers will be looking to the November 11 announcement to gauge the accuracy of Citi's projections and to understand the company's trajectory as it moves into the fiscal year 2025. The price target revision is a reflection of Citi's latest expectations for Tyson Foods' financial performance in the near term.
In other recent news, Tyson Foods has been the subject of various analyst assessments and internal changes. Stephens initiated coverage on Tyson Foods with an Equal Weight rating, citing the company's significant presence in the multi-protein industry and its effective capital allocation strategy. However, the firm expressed caution about the company's Beef division, suggesting that challenges may persist.
Piper Sandler downgraded Tyson Foods from a Neutral to an Underweight rating due to concerns over increasing cattle costs and potential risks to beef and chicken pricing. In contrast, Barclays maintained an Overweight rating, highlighting Tyson Foods' ongoing internal improvements and the anticipated resilience of its chicken, pork, and prepared foods segments.
BMO Capital Markets and Citi revised their price targets for Tyson Foods following its strong third-quarter earnings per share (EPS) of $0.87, surpassing expectations of $0.67, and revenue of $13.35 billion, exceeding projections of $13.21 billion. Additionally, Tyson Foods announced the appointment of Curt Calaway as its new Chief Financial Officer.
InvestingPro Insights
As Tyson Foods approaches its Q4 earnings report, InvestingPro data offers additional context to Citi's analysis. Despite the lowered price target, Tyson Foods maintains a market cap of $20.74 billion, reflecting its significant presence in the Food Products industry. The company's revenue for the last twelve months stands at $53.09 billion, although it has experienced a slight revenue decline of 0.33% over this period.
InvestingPro Tips highlight Tyson's strong dividend history, having raised its dividend for 11 consecutive years and maintained payments for 50 years. This could be particularly appealing to income-focused investors, especially with the current dividend yield of 3.36%. Additionally, analysts predict that Tyson will return to profitability this year, which aligns with Citi's expectation of no negative surprises in the company's initial operating profit guidance.
While Tyson faces challenges, including weak gross profit margins as noted by InvestingPro, its liquid assets exceeding short-term obligations suggest financial stability. This could provide the company with flexibility as it navigates the economic environment Citi references.
For investors seeking a more comprehensive analysis, InvestingPro offers 8 additional tips for Tyson Foods, providing deeper insights into the company's financial health and market position.
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