Is Tyson Foods a good stock to buy?
Tyson is one of the biggest players in the global meat processing market. The company is the world's second largest processor and marketer of chicken, beef, and pork after JBS S.A. and annually exports the largest percentage of beef out of the United States. In 2018 it was ranked fourth on a list of the world's top food brands by brand value. Let’s examine Tyson Foods’s valuation and outlook in more detail to determine if there’s still a good buy right now.
Why Tyson Foods stock jumped to a new all-time High yesterday?
Tyson Foods Inc. (NYSE:TSN) shares jumped 12% to an all-time high after the chicken, beef and pork producer reported Q1 results that smashed estimates. Shares rebounded from a one-month low to reach a record $99.20, up 15% from the start of the year. Tyson's sales rose 24% year over year to $12.9 billion in its fiscal 2022 first quarter, more than the company predicted. Net income jumped to $1.12 billion with Tyson earning $2.87 per share. For fiscal 2022, Tyson expects sales to be at the upper end of $49 billion to $51 billion. Analysts expect $50.53 billion in revenue.
The surge reflects strong demand and high prices for Tyson’s beef, pork and chicken, as U.S. labor shortages have limited production. Average prices for Tyson's beef, chicken, and pork products jumped 31.7%, 20%, and 12.8%, respectively. Average prices for all of Tyson’s products climbed by 19.6%. Last year, beef prices rose by 9.3% and pork by 8.6%, according to the Agriculture Department. In 2019, before the pandemic, the average annual increases for beef and pork were of 1.6% and 1.2%, respectively.
Is Tyson Foods (TSN) a Great Value Stock Right Now?
The stock is trading with a P/E ratio of 11.87, which compares to its industry's average of 14.40. The price-to-earnings ratio indicates the stock is trading at a lower price compared to the Food industry. TSN's current P/B of 1.85 looks attractive when compared to its industry's average P/B of 2.46. TSN’s current P/S ratio of 0.7 compares to its industry's average P/S of 0.82. Finally, TSN has a P/CF ratio of 8.09 looks attractive when compared to its industry's average P/CF of 13.63. These are only a few of the key metrics, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, TSN looks like an impressive value stock at the moment.
Is Tyson Foods stock a buy right now?
Tyson Foods is still trading at a fairly cheap price according to valuation. However, although TSN is currently trading below the industry PE ratio, the negative profit outlook does bring on some higher risk buying decision for Tyson Foods. I recommend you dig deeper into the stock, do more analysis on the company and think about the risks that come with negative growth prospects in the future.
How do I buy stock in Tyson Foods?
The easiest way to buy Tyson Foods (NYSE: TSN) stock is through an online stockbroker. You can buy Tyson Foods (TSN) stock and many other stocks or ETFs on eToro, Robinhood, or any other discount broker.
