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Credit Suisse Notes 3 Pieces Of New Information That Favor Tyson Foods, Inc.

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Robert Moskow of Credit Suisse upgraded shares of Tyson Foods, Inc. (NYSE: TSN) on Wednesday to Neutral from Underperform with a price target raised to $42 from $38. The analyst noted three distinctive events that justify the upgrade.

First, the highly respected consulting firm EMI recently stated that it expects a 1 percent increase in chicken production in 2015 versus the USDA's forecast for a 3 percent rise. The combination of a tight supply and strong chicken demand has kept chicken prices above its normal seasonal patterns.

Second, according to the analyst's research, beef margins have jumped “into the high end of the normalized range.” Tyson Foods will also enjoy strong margins and similar benefits for the rest of the calendar year.

Finally, sow prices continue to decline, which bodes well for Hillshire Brands' profit margins in its first quarter under Tyson Foods. Hillshire Brands has “strong momentum” heading into the final quarter of the year due to its “extraordinary” range of product innovation and strong consumer demand.

Bottom line, according to Moskow, "Tyson Foods has an excellent management team and a portfolio that is uniquely positioned to capitalize on the evolving consumer trend toward higher protein and lower carbohydrate diets. In our view, this brings the risk/reward in the stock back into balance."

Latest Ratings for TSN

DateFirmActionFromTo
Aug 2020Credit SuisseDowngradesOutperformNeutral
Jul 2020Seaport GlobalInitiates Coverage OnNeutral
Jun 2020Credit SuisseMaintainsOutperform

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