Tyson Foods (TSN): Cutting PT To $75 - Jefferies
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Jefferies analyst, Akshay Jagdale, reiterated his Buy rating on shares of Tyson (NYSE: TSN) but cut his price target to $75 after the stock underperformed the S&P since September (%) due to the 4Q miss & rotation out of staples.
The analyst believes the 4Q miss was caused by transitory/company-specific factors and the LT thesis, predicated on the company’s value-added growth strategy, remains intact. At 11.5x the analyst's NTM EPS estimate, he believes the market is significantly undervaluing TSN’s value-added earnings and the company presents one of the best M&A optionality profiles in the space.
The PT of $75 (down from $85) is derived by discounting a FY20, $93 valuation over 2.86 years (i.e. one year forward) at a rate of 8%. However there are risks: 1) material increases in grain costs; 2) potential execution risk related to the integration of HSH; and 3) potential supply disruptions related to animal disease or natural disasters.
Shares of Tyson closed at $57.60 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, Analyst EPS Change, Analyst PT Change
Related EntitiesJefferies & Co, Standard & Poor's, Earnings
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