Tyson Foods (TSN) Company Overview & Stock Price Forecast
This article provides a brief analysis and stock rating for Tyson Foods (TSN) including an updated stock price target. Additional data on the company’s earnings yield, price/earnings ratio, return on invested capital and YTD performance are discussed as well.
Tyson Foods Fundamentals
Stock Price Target: $102.39
In the section below, we discuss the earnings yield, P/E, return on invested capital and YTD performance for Tyson Foods in comparison to the Food Processing industry and the S&P 500.
Tyson Foods is a Large Cap company with a Market Cap of $32.2B.
How are investors using Tyson Foods earnings yield to assess the company?
The earnings yield is used to show the percentage of a company’s earnings per share. Investors typically use earnings yield to determine which assets are underpriced or overpriced relative to other variables, like sector, industry or bond yields. Simply put, the earnings yield of a company can be used to assess how expensive a company is in relation to the earnings that are generated. When valuing companies, the SIS Research Group does not utilize the inverse P/E ratio to calculate the earnings yield. Instead, we use an adjusted earning yield calculation to capture variation amongst companies (i.e. debt and tax rates).
The current earnings yield for Tyson Foods is 16.98%, in comparison to 3.33% for the S&P 500 and 1.52% for the 10-year treasury bond. The median earnings yield for the Food Processing industry is 7.18%.
What does Tyson Foods Price-to-Earnings Ratio (P/E) tell investors about the company?
The price-to-earnings ratio (P/E) is a relatively popular metric used by investors and analysts for valuing a company’s stock. The P/E ratio can be used to show how a stock’s valuation compares to other companies and the total market. Investors use the P/E ratio to determine what the market is willing to pay today based on a company’s past or future earnings. A high P/E ratio could mean that a stock’s price is too high relative to earnings, which could be a signal that a stock is currently overvalued. In turn, a low P/E ratio could indicate that a company’s current stock price is low relative to earnings.
Tyson Foods is currently trading at a P/E of 10.56. The P/E for the Food Processing industry is 17.80 and the P/E for the S&P 500 is 30.02.
What is the current Price-to-Sales Ratio (P/S) for Tyson Foods?
The Price-to-Sales Ratio (P/S) looks at a company’s market cap and revenue to determine valuation. The P/S ratio is calculated by taking a company’s market cap and dividing by the total sales or revenue. The P/S ratio gives an idea of how much the market values every dollar of a company’s sales and can be effective in valuing unprofitable growth stocks or companies that are currently undergoing special situations or challenges. A lower the P/S ratio can be an indicator of good value.
Tyson Foods is currently trading at a P/S of 0.68. The P/S for the Food Processing industry is 1.71 and the P/S for the S&P 500 is 3.26.
How does Tyson Foods Price-to-BookRatio (P/B) compare to the Food Processing industry?
Price-to-book value (P/B) is the ratio of the market value of a company’s shares divided by its book value of equity (the value of it’s assets on the books). The book value is the difference between the book value of assets and liabilities. Typically, investors use the P/B ratio to assess if a stock is valued properly (a value of one means that the stock price is trading in line with the book value of the company). A company with a high P/B ratio could mean the stock price is overvalued as well as the converse.
Tyson Foods P/B ratio is 1.81. The P/B for the Food Processing industry is 2.57 and the P/B for the S&P 500 is 4.91.
How attractive is Tyson Foods Return on Invested Capital (ROIC) to investors?
Investors use the return on invested capital (ROIC) to assess how efficient a company is at turning capital into profits. The ROIC is the amount of money a company makes on it’s investments that is above the average cost of debt and equity.
Investors can use the ROIC to provide context for metrics like the (P/E) ratio. For instance, when used in isolation a low P/E ratio could suggest a company is oversold but the decline could be because a company is no longer generating value for shareholders. Conversely, companies that consistently generate high rates of ROIC can plausibly trade at a premium compared to other stocks, even if their P/E ratios are high.
Tyson Foods ROIC is currently 11.54% in comparison to 8.27% for the Food Processing industry and 8.60% for the S&P 500.
How has TSN stock performed over the past year? What is the current analyst price target?
Over the past 52 weeks, Tyson Foods has traded between the range of $62.59 and $91.11.
The current Analyst Price Target for Tyson Foods is $102.39.
What is Tyson Foods YoY Performance in comparison to its industry and the total market?
The YoY performance for Tyson Foods is 40.60%. The Food Processing industry has a YoY performance of 15.29% in comparison to the YoY S&P 500 performance of 26.90%.
Recent Financial Results (FY 2021)
- Total Company GAAP operating margin of 9.3%
- Generated $3.8B of operating cash flows
- Results impacted by approximately $335M of direct incremental expenses related to COVID-19
- Reduced total debt by approximately $2B; reduced net debt by approximately $3B
- EPS of $8.34, up 48% from prior year; Adjusted EPS of $8.28, up 53% from prior year
- Operating income of $4.39B, up 46% from prior year; Adjusted operating income of $4.28B, up 42% from prior year
Stock Price Target: $102.39
Tyson Foods operates as a food company worldwide. It operates through four segments: Beef, Pork, Chicken, and Prepared Foods. The company manufactures and markets frozen and refrigerated food products under the Jimmy Dean, Hillshire Farm, Ball Park, Wright, State Fair, Aidells, and Gallo Salame brands.
It sells its products through its sales staff to grocery retailers, grocery wholesalers, meat distributors, warehouse club stores, military commissaries, industrial food processing companies, chain restaurants or their distributors, live markets, international export companies, and domestic distributors who serve restaurants and food service operations, such as plant and school cafeterias, convenience stores, hospitals, and other vendors, as well as through independent brokers and trading companies.
The company was founded in 1935 and is headquartered in Springdale, Arkansas. The current CEO is Donnie King.
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This material is provided for informational purposes only and is not financial advice. The information contained herein should not solely be used for the formation of an investment decision, whether you are a long term or short term investor.