Skip to Content
Morningstar
Get 14 Days Free

Tyson Foods Inc Class A TSN

Morningstar Rating
Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Stewardship

PREMIUM

No-Moat Tyson’s Recovery From the Pandemic Is on Track; Shares Offer Attractive Risk/Reward

Analyst Note

| Rebecca Scheuneman, CFA |

No-moat Tyson’s fiscal fourth-quarter results reinforce our conviction in our $86 fair value estimate, and we suggest investors build positions. Despite $540 million (125 basis points) in direct COVID-19 costs in fiscal 2020 to cover bonuses, protective equipment, sanitation, testing, plant downtime, etc., the company delivered a 30-basis-point increase in adjusted operating margins to 7.4%, topping our 6.7% estimate. The improvement was driven by strong results in the beef and pork segments, as production disruptions drove the cost for livestock lower and prices for processed meat higher. Fiscal 2020 sales increased 2% to $43.2 billion, modestly better than our $43.1 expectations, although excluding acquisitions and a 53rd week, sales fell about 2%.

Read Full Analysis

Company Profile

Business Description

Tyson Foods is the largest U.S. producer of processed chicken and beef. It's also a large producer of processed pork and protein-based products under the brands Jimmy Dean, Hillshire Farm, Ball Park, Sara Lee, Aidells, and State Fair, to name a few. Tyson sells 90% of its products through various U.S. channels, including retailers (45%), food-service (31%), and other packaged food and industrial companies (11%). In addition, 10% of the company's revenue comes from exports to Canada, Mexico, Brazil, Europe, China, and Japan. The remaining 3% of revenue is composed of intersegment sales.

Contact
2200 West Don Tyson Parkway
Springdale, AR, 72762-6999
T +1 479 290-4000
Sector Consumer Defensive
Industry Farm Products
Most Recent Earnings Sep 30, 2020
Fiscal Year End Oct 3, 2021
Stock Type High Yield
Employees 139,000

Related

Commentary
Stakeholder Votes Divided on Social Justice
Proxy voting reveals disagreement between the influential majority and smaller shareholders on diversity, equity and inclusion issues.
Jackie Cook
Commentary
SEC Proxy Voting Rule Changes Could Weaken Minority Shareholder Influence
The proxy process sounded an alarm on working conditions in the meatpacking industry.
Jackie Cook
Our Picks
8 Stocks to Avoid
These stocks are all extremely overvalued by our standards--and carry a good deal of uncertainty, too.
Susan Dziubinski
Commentary
The Week Ahead: Walmart Aims to Exceed Expectations Again This Quarter
Other large companies in retail, media, and software are also reporting earnings this week.
Hannah Pelfresne
Stock Strategist
Beyond Meat Looks Rich
The company's a pioneer in plant-based meat, but competition is set to intensify.
Rebecca Scheuneman
Stock Strategist
Despite Softer Outlook, Pilgrim's Pride Is Attractively Valued
Headwinds abound, but the poultry producer is poised to benefit from recent tie-ups.
Rebecca Scheuneman
Stock Analyst Update
Tyson Shares Look Undervalued
The no-moat firm has more earnings stability than other processors thanks to its diverse mix of businesses.
Rebecca Scheuneman
Stock Analyst Update
Tyson Purchase Sound but Low Impact
Buying Keystone Foods gives no-moat Tyson international growth potential, but it won't significantly change the firm's ability to generate economic returns.
Zain Akbari
Stock Analyst Update
Outlook Intact for No-Moat Tyson
We still expect short-term challenges in the firm's chicken and pork units to yield to our long-term targets for the firm.
Zain Akbari
Market Update
Should Investors Snack on Packaged-Food Stocks?
M&A activity is heating up in sector. Here's where investors can find opportunity.
Bryan Borzykowski
Stock Analyst Update
Outlook Intact for Tyson After Solid Third Quarter
The firm's fiscal 2018 guidance exceeds our expectations, and we plan to raise our fair value estimate.
Zain Akbari
Stock Strategist Industry Reports
Are Meal-Kit Delivery Companies a Threat or an Opportunity?
We see new growth avenues for CPG companies and online retailers.
R.J. Hottovy
Quarter-End Insights
Consumer Defensive: Still Thirsty for Growth
Although growth remains sluggish, opportunities in consumer defensive stocks are still available for selective investors.
Zain Akbari
Stock Analyst Update
Tyson: Short-Term Concerns But Long-Term Outlook Intact
Despite the company's soft earnings and management change, we don't plan to make a significant change to our fair value estimate.
Zain Akbari
Stock Strategist
Demand Spurs Pilgrim's Progress
Pilgrim's Pride should benefit from growing consumption of chicken domestically and abroad.
Zain Akbari
ETF Specialist
Play Defense With This ETF
A low-cost way to access 39 consumer defensive firms found in the S&P 500.
Robert Goldsborough
Fund Spy
Nominees for 2014 Domestic-Stock Fund Manager of the Year
Five candidates who did more than ride the market's currents.
Dan Culloton
Fund Spy: Morningstar Medalist Edition
An Early Line on the Morningstar Domestic-Stock Fund Manager of the Year
These managers could be among those considered for the 2014 award.
Dan Culloton
Quarter-End Insights
Shop for Moats in Consumer Defensive Stocks
With roughly two thirds of this sector enjoying a narrow or wide economic moat, we continue to find pockets of opportunity when short-term concerns outweigh our forecasted long-term growth trajectories.
Adam Fleck
Quarter-End Insights
Credit Market Outlook: Tight Spreads Will Keep a Lid on Returns
As credit spreads have tightened on a nearly continuous trend over the past year, they are becoming richly valued relative to their historical average.
David Sekera