Jefferies Thinks Tyson Foods’ Stock is Going to Recover

By Austin Angelo

Jefferies analyst Akshay Jagdale maintained a Buy rating on Tyson Foods (NYSE: TSN) today and set a price target of $75. The company’s shares closed yesterday at $58.72, close to its 52-week low of $58.33.

Jagdale noted:

“The level of conviction we have in our LT thesis (which is predicated on TSN’s value-added growth strategy) is lower owing to the magnitude of yesterday’s guide-down. However, we view the implied ~28% valuation discount to peers as overdone & we view this as an attractive entry point for LT investors. We acknowledge that it might take a couple of quarters & an acquisition for earnings momentum to turn positive & for the multiple to start re-rating higher again.”

According to TipRanks.com, Jagdale is a 4-star analyst with an average return of 4.7% and a 54.3% success rate. Jagdale covers the Consumer Goods sector, focusing on stocks such as Lamb Weston Holdings, McCormick & Company, and J & J Snack Foods.

The word on The Street in general, suggests a Moderate Buy analyst consensus rating for Tyson Foods with a $71.33 average price target, which is a 21.5% upside from current levels. In a report issued on July 27, Stephens also maintained a Buy rating on the stock with a $82 price target.

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Based on Tyson Foods’ latest earnings release for the quarter ending March 31, the company reported a quarterly revenue of $9.8 billion and net profit of $315 million. In comparison, last year the company earned revenue of $9.81 billion and had a net profit of $447 million.

Based on the recent corporate insider activity of 71 insiders, corporate insider sentiment is negative on the stock.

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Tyson Foods, Inc. engages in the production of processed food. It operates through the following segments: Chicken, Beef, Pork and Prepared Foods. The Chicken segment involves in domestic operations related to raising and processing live chickens into fresh, frozen, and value-added chicken products, as well as sales from allied products.