Barclays Reiterates Overweight Rating on Tyson (TSN)
Barclays analyst Benjamin Theuer reiterated an Overweight rating and $76.00 price target on Tyson (NYSE: TSN).
The analyst comments "Tyson reported stronger-than-expected results for 4FQ24 and anticipates continued growth into FY25. We remain OW with a $76 price target, expecting the company's Chicken operations to outperform the outlook and drive consolidated operating income growth amid higher marketing costs. Focus on the Go-Forward: After a strong recovery year for Tyson, management is committed to keeping the momentum heading into FY25. The company's focus remains on disciplined cash usage and incremental margin gains across all segments except Beef given the current weakness in the cattle market. Additionally, a new advertising campaign is set to help drive market growth in Prepared Foods and the company's operational improvements in both Pork and Chicken set Tyson up for YoY margin expansions. We remain OW with a $76 price target, as we expect continued execution and profitability strength in all non-Beef segments throughout FY25. Solid, yet Conservative, Guidance: Management also outlined its initial guidance for FY25, calling for flat-ish sales and adj. operating income growth of ~10% at the midpoint, driven primarily by Chicken and Prepared Foods. While the outlook calls for solid growth, we view it as somewhat conservative and believe that the company will continue to realize strong Chicken profitability gains due to a strong market and operational efficiencies. Additionally, we see potential in Prepared Foods outperformance due to market share gains from its new advertising campaign. In all, we slightly lower our 2025 adj. operating income outlook due to the ~$100mn related to the new advertising and marketing campaign but remain above guidance for Chicken."
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Shares of Tyson closed at $58.81 yesterday.