UPDATE: DA Davidson Downgrades Tyson Foods to Neutral on Production Outlook
DA Davidson reduced its rating on Tyson Foods (NYSE: TSN) from Buy to Neutral and lowered its price target from $24 to $15.
DA Davidson said, "Higher corn prices are obvious and not new news. Our biggest concern: a relatively sanguine outlook for production – Tyson cut chicken 6%-8% about a year ago and today said it doesn't see the need to cut production further. In 2008 Donnie Smith famously declared “I'm done cutting; let the other guys come get some.” That didn't work out well. As a category leader, the most “leader-like” behavior would be to lead with more cuts – without production cuts in FY13 the industry will likely have too much protein and chicken margins may go negative."
Tyson Foods closed at $15.40 on Friday.
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