Tyson Earnings: Beef and Pork Remain Challenged, but We See Upside When Looking Through the Cycle

We expect to trim our $85 per share fair value estimate for no-moat Tyson by a low-single-digit percentage as weakness in beef and pork is likely to linger longer than we thought. Still, we don’t see any changes to the fundamental supply and demand dynamics and expect an eventual return to better profitability as the cycle progresses. Specifically, our long-term outlook for low-single-digit percentage annual revenue growth and a return to mid- to high-single-digit adjusted operating margins compares favorably to fiscal 2023’s sales growth and margin of negative 1% and 2%, respectively. Shares trade significantly below our fair value estimate and offer an attractive risk-adjusted upside, as well as a 4% dividend yield.