Tyson Foods playing chicken with trade tariffs

Tyson Foods ($TSN) today downgraded it’s outlook for FY2018 after being quite optimistic on the year. Looking at a company press release, they cite a few major reasons why they are downgrading guidance from $6.55-$6.70 yearly EPS to $5.70-$6.00 per share. Cited reasons why Tyson Foods feels this way include:

  • “Uncertainty in trade policies and increased tariffs negatively impacting domestic and export prices”
  • Volatile commodities markets
  • Slowing domestic chicken demand
  • Margins in pork slimming due to off kilter supply and demand
  • Less positive tax reform benefit

Why you should take a bite out of Tyson Foods now

Trade tariffs and commodities markets are no joke, but Tyson Foods can benefit from the micro-level industries that are popping up, mainly because this is their wheelhouse.

Frozen meal sales are forecast to grow to $47 billion annually by 2026, and no signs of slowing down. The majority of those frozen sales are chicken, and something the industry might not be fully realizing from a top line perspective is the addition of home meal kits, a la Blue Apron ($APRN) and Hello Fresh. (Let’s also not forget that on the drop of a dime, Whole Foods can start the meal delivery kits as well).

Tyson Foods could experience significant growth within the frozen and meal kit industries, and cutting out traditional distributors and going direct to consumer, more than mitigating any potential damage from tariffs and trade wars.

Unfreezing profit potential in Tyson Foods

Looking at Tyson Foods and public financial statements, and comparing EBITDA multiples of competitors like Hormel ($HRL), Kellog Company ($K), Dean Foods Company ($DF), and General Mills ($GIS), Tyson still has quite a bit of growth. Taking a peek under the hoods of all of these companies, we can see that Tyson can trade a bit higher at an average 11.3x multiple, and we can put a $91.89 price target on the company, representing a healthy 45% upside.

The company also pays a semi-decent dividend, at 2.04%, even at a modest 12.8% payout ratio.

So kick back, relax, grab a TV tray, and burn the roof of your mouth on a brownie because Tyson is set to be delicious soon.

January 2, 2021 Update: We have just announced our BEST STOCK NEWSLETTER of 2020 AWARD!

CLICK HERE to find out which stock newsletter was up 78% in 2020 (and whose 2019 picks are now up 113%).

*** Our Award for BEST STOCK NEWSLETTER of 2020 ALERT ***

Updated January 2, 2021

At WallStreetSurvivor, we subscribe to dozens stock recommendation and advisory newsletters. There is ONE newsletter that is constantly outperforming all of the others--The Motley Fool Stock Advisor.

Five of their 2020 stock picks have doubled and the average return of all 24 of their stock picks for 2020 is up 78%!

We have been tracking ALL of the Motley Fool stock picks since January 2016. That's 5 years and 120 stock picks. As of Friday, January 1, 2021 the Motley Fool's January stock pick (TSLA) is up 720%, their March pick (ZM) is up 172%, their April pick of SHOP is up 226% and their June pick CRWD is up 120%; and another two have more than doubled. In addition, 10 of their 2019, 12 of their 2018, 11 of their 2017, 15 of their 2016. Most impressively, over the last 5 years that we have been tracking every recommendation, their average stock pick is up 209%--tht means over the last 5 years their stock picks, on average, have TRIPLED!

Now no one can guarantee that their next picks will be as strong, but our 5 years of experience has been super-profitable. The important thing about the Fool stock picks is you have to buy them the day they are recommended because they usually pop 5-10% in the first 72 hours after the release their recommendation. You sure don’t want to risk missing out on their next pick.

Normally the Fool service is priced at $199 per year but they are currently offering a NEW SUBSCRIBER DISCOUNT that allows you to get theiir next 24 stock picks for just $99/year. HERE is the LINK to visit their New Subscriber Discount page.

CLICK HERE to get access to all The Motley Fool’s Stock Picks and their next 12 months of picks for just $99 per Year! 



Robinhood was the first brokerage site to NOT charge commissions when they opened in 2013. They just past 10,000,000 accounts and to celebrate they are offering up to $1,000 in free stock when you open a new account.

Here’s the details: You must click on a special promo link to open your new Robinhood account. Then when you fund your account with at least $10, you will receive one stock valued between $5 and $500. Then, you will get a link to share with your friends. Every time one of your friends opens an account, you will receive another free stock valued between $5 and $500. Click here to learn more about this Special Robinhood offer.

Claim your free stock NOW (before it’s too late)

Comments are closed.