Pivotal Research Starts Tyson (TSN) at Buy

Pivotal Research initiated coverage on Tyson (NYSE: TSN) with a Buy rating and a price target of $55.00. Analyst Timothy S. Ramey thinks it will benefit as consumer trends shift from carbohydrate-based meals to higher protein offerings. He also has a positive opinion of CEO Donnie Smith.

"Tyson Foods is at an interesting crossroads. In past cycles at this point, we might be arguing a SELL rating on TSN. Margins are at historically high levels; the company has just piled on a lot of debt to do a major acquisition and we are benefitting from lower input costs that will, over time have only one way to move – back higher. The shares have more than doubled in the past two years. If this was the cyclical Tyson of old, we would most certainly have a SELL rating on the shares," said Ramey.

"Nevertheless, we are BUY rated on Tyson with a $55 price target. It all starts with leadership and culture and in important ways Tyson has never been stronger. CEO Donnie Smith would easily place in the top-ten, maybe the top five of CEOs we have known over 30 years covering the food sector. Tyson has never operated as well as it does today in the modern (post IBP) period. We see the protein market continuing to benefit from meaningful tailwinds as consumers shift from carbohydrate-based meals and look to higher protein offerings. We would cite the powerful cash generation and the ability to pay down debt quickly. In important ways Tyson has transformed itself into a less volatile, more exciting growth vehicle," he added.

For an analyst ratings summary and ratings history on Tyson click here. For more ratings news on Tyson click here.

Shares of Tyson closed at $41.31 yesterday.

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