Tyson Foods
TSN
$52.98
+0.99%
Tyson Foods is a protein-focused food producer operating in the Consumer Defensive sector, selling raw chicken, beef, pork, and prepared foods through retail and foodservice channels. Chicken and beef are its two largest segments at roughly 40% and 30% of sales respectively, with prepared foods contributing about 18% through brands like Tyson, Jimmy Dean, Hillshire Farm, Ball Park, and Sara Lee, though the company lacks dominant share in most of these competitive categories. The current investor narrative centers on a sharp divergence between segments: a historic U.S. cattle shortage has driven ground beef to record prices near $6.67/lb while the national herd has shrunk to 1951 levels, pressuring Tyson's beef margins even as chicken and prepared foods have been leaned on to offset the slump. Recent headlines capture the tension — Q2 results beat expectations with raised full-year guidance on chicken and prepared foods strength, yet the stock has fallen more than 6% since that report as lowered forward guidance and disappointing earnings signal near-term headwinds, leaving investors debating whether this is a cyclical trough or a structural earnings reset.…
TSN
Tyson Foods
$52.98
Related headlines
Investment Opinion: Should I buy TSN Today?
The synthesized recommendation is Hold. The analyst consensus rating is Hold (mean 2.62), with an average target price of $65.08 implying 22.8% upside, but the stock's persistent downtrend and structural beef headwinds warrant caution. The core thesis is that Tyson is a deep-value play with a defensive profile, but the timing of a recovery is uncertain, and the dividend sustainability is a concern.
Supporting evidence includes the forward PE of 12.69x, which is well below the sector's high-teens average, and the PS ratio of 0.346, near multi-year lows. Revenue grew 4.43% YoY in Q2 FY2026, and TTM free cash flow is $1.227 billion, providing some financial flexibility. However, gross margin is only 6.54%, net margin is 0.87%, and the payout ratio is 147%, indicating earnings do not cover the dividend. The implied upside to the average analyst target is 22.8%, but the wide target range ($56-$76) reflects low conviction.
The biggest risks are a prolonged beef shortage, a dividend cut, and continued margin compression. The rating would upgrade to Buy if the forward PE compresses below 10x or if beef margins show sustained improvement, and downgrade to Sell if revenue growth turns negative or if the dividend is cut. Relative to its history and peers, TSN appears undervalued on PS and PB, but the discount is justified by inferior profitability and commodity exposure. The stock is fairly valued to slightly undervalued, but lacks a near-term catalyst.
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TSN 12-Month Price Forecast
Tyson Foods presents a classic value trap dilemma: the stock is cheap on forward earnings and offers a high dividend yield, but the underlying business faces structural headwinds in beef and has razor-thin margins. The analyst consensus is Hold with a target price 22.8% above the current price, suggesting that while the risk/reward is balanced, the upside is not compelling enough to warrant a Buy rating. The low beta of 0.371 makes it a defensive holding, but the stock's idiosyncratic downtrend and underperformance versus the S&P 500 are concerning. I would upgrade to bullish if beef margins show sustained improvement and the dividend is covered by earnings, and downgrade to bearish if the dividend is cut or if revenue growth turns negative.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Tyson Foods's 12-month outlook, with a consensus price target around $65.08 and implied upside of +22.9% versus the current price.
Average Target
$65.08
0 analysts
Implied Upside
+22.9%
vs. current price
Analyst Count
—
covering this stock
Price Range
$56 - $76
Analyst target range
Twelve analysts cover Tyson with a consensus recommendation of "hold" (recommendation mean of 2.62 on a 1-5 scale where 1 is strong buy and 5 is strong sell), reflecting a distinctly neutral-to-cautious stance. The average target price is $65.08, which implies +22.8% upside from the current price of $52.98 — a meaningful gap that suggests analysts see value at these levels even as they refrain from bullish ratings. The consensus leans neutral rather than bearish, with the target price well above the current price but the recommendation unwilling to commit to a buy, indicating analysts believe the risk/reward is balanced pending evidence of a beef margin recovery.
The target range spans $56.00 to $76.00, a spread of $20.00 or roughly 38% of the current price, signaling meaningful uncertainty about the earnings trajectory. The high target of $76.00 implies roughly +43% upside and likely assumes a full beef cycle recovery, successful chicken and prepared foods momentum, and multiple expansion back toward historical norms; the low target of $56.00 implies only +5.7% upside and prices in continued margin compression, persistent cattle cost inflation, and limited earnings recovery. Institutional ratings show a mixed but slightly constructive pattern: Piper Sandler upgraded to Overweight in April 2026 and maintained it in June, Mizuho moved to Outperform in March, and Barclays has held Overweight since February, while JP Morgan, Bernstein, and B of A remain Neutral — the split between bulls and neutrals, with no outright sells, suggests the debate is about timing rather than direction, and the wide target spread confirms that conviction remains low across the coverage universe.
Bulls vs Bears: TSN Investment Factors
The bear case currently has stronger evidence due to the persistent downtrend, unsustainable dividend, and structural beef headwinds. However, the bull case rests on deep value and analyst targets that imply significant upside, suggesting the market may be overly pessimistic. The most important tension is whether the beef cycle represents a cyclical trough or a structural reset; if it's cyclical, the forward PE of 12.69x and 22.8% upside to analyst targets make TSN attractive, but if structural, the thin margins and dividend risk could lead to further downside. The low beta and defensive nature of the business provide some cushion, but the stock's idiosyncratic risks are significant. Ultimately, the resolution of the beef shortage and the company's ability to sustain its dividend will determine the direction.
Bullish
- Deep Value on Forward Earnings: The forward PE of 12.69x is well below the Consumer Defensive sector's typical high-teens multiple, and the PS ratio of 0.346 is roughly 85% below its Q4 FY2021 level of 2.24x. This suggests the market is pricing in a worst-case scenario that may already be reflected in the stock price.
- Analyst Target Implies 22.8% Upside: The average analyst target price of $65.08 implies +22.8% upside from the current $52.98, with a high target of $76.00 suggesting +43% potential. Even the low target of $56.00 is above the current price, indicating analysts see limited downside from here.
- Chicken and Prepared Foods Offsetting Beef: Q2 FY2026 revenue grew 4.43% YoY to $13.653 billion, driven by chicken and prepared foods strength, which offset the beef slump. This demonstrates the company's diversification and ability to navigate commodity cycles.
- Low Beta Defensive Profile: With a beta of 0.371, Tyson is roughly 63% less volatile than the S&P 500, making it a defensive holding in turbulent markets. This low correlation can reduce portfolio drawdowns even if the stock's own trend is weak.
Bearish
- Severe Underperformance and Downtrend: TSN has underperformed the S&P 500 by 21.75% over the past year, with a 1-year price change of -5.53% versus the market's +16.22%. The stock is in a clear downtrend across all timeframes, sitting just 3.5% above its 52-week low.
- Unsustainable Dividend Payout: The payout ratio of 147% means the 3.70% dividend yield is not covered by earnings, posing a sustainability risk. If the beef cycle does not improve, management may need to cut the dividend, which could trigger further selling.
- Razor-Thin Margins and Volatility: Gross margin is only 6.54%, with net margin at 0.87% and operating margin at 2.65%. These thin cushions leave little room for error, and margins have oscillated violently (gross margin ranged from 5.24% to 8.22% in recent quarters).
- Beef Segment Structural Headwinds: The U.S. cattle herd has shrunk to 1951 levels, driving ground beef to record prices near $6.67/lb. This historic shortage pressures Tyson's beef margins, which is a significant drag as beef accounts for roughly 30% of sales.
TSN Technical Analysis
Tyson is in a clear, sustained downtrend across every measurable horizon, with the current price of $52.98 sitting just 3.5% above its 52-week low of $50.56 and roughly 23.7% below its 52-week high of $69.48 — placing it in the bottom quartile of its annual range. The 1-year price change of -5.53% understates the damage: relative strength versus the S&P 500 is -21.75% over one year, meaning Tyson has massively underperformed a market that gained 16.22% over the same period. This positioning near the lows is characteristic of a falling knife rather than a value opportunity, particularly given the stock's max drawdown of -25.21% from its peak.
Short-term momentum is deteriorating rather than stabilizing. The 1-month change of -5.07% and 3-month change of -7.75% show losses accelerating into the present, while the 6-month change of -12.17% and YTD change of -8.72% confirm the decline is persistent, not a brief pullback. The most recent price action is especially concerning: after trading near $55 in early September, TSN gapped down to $51.76 on September 3 and has only weakly recovered to $52.98, with the 1-month relative strength of -4.01% versus SPY showing the stock is losing ground even as the broader market declines modestly (-1.06%). The 1-year trend and 1-month trend are aligned to the downside, which signals trend continuation rather than mean reversion.
Key technical levels are well-defined: support sits at the 52-week low of $50.56, and a decisive breakdown below that level would likely trigger momentum-driven selling and open the door to new multi-year lows. Resistance is anchored at the 52-week high of $69.48, with intermediate resistance around the $57-$58 zone where the stock repeatedly failed in July and August. The beta of 0.371 is a critical risk-management input — Tyson is roughly 63% less volatile than the S&P 500, meaning it typically moves far less than the market in either direction, which limits downside velocity but also caps upside participation; position sizing should account for this low-beta, defensive profile even as the stock's own idiosyncratic downtrend persists.
Beta
0.37
0.37x market volatility
Max Drawdown
-25.2%
Largest decline past year
52-Week Range
$51-$69
Price range past year
Annual Return
-5.5%
Cumulative gain past year
| Period | TSN Return | S&P 500 |
|---|---|---|
| 1m | -5.1% | -1.6% |
| 3m | -7.7% | +1.3% |
| 6m | -12.2% | +13.9% |
| 1y | -5.5% | +16.3% |
| ytd | -8.7% | +12.1% |
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TSN Fundamental Analysis
Tyson's revenue trajectory is modestly growing but decelerating in quality. The most recent quarter (ending 2026-03-28) posted revenue of $13.653 billion, up 4.43% year-over-year, but this compares against a Q1 FY2026 revenue of $14.313 billion and Q4 FY2025 revenue of $13.86 billion — a sequential decline of 4.6% from Q1. Segment data reveals the internal tension: Beef at $5.205 billion and Chicken at $4.286 billion dominate the mix, with Prepared Foods at $2.515 billion and Pork at $1.579 billion; the beef slump driven by record cattle costs is the primary drag, while chicken and prepared foods are the offsetting growth engines. The 4.43% YoY growth is positive but thin for a company that needs volume and mix improvement to offset commodity cost inflation.
Profitability is razor-thin and volatile. Q2 FY2026 net income was $260 million on $13.653 billion in revenue, a net margin of just 1.90%, while the trailing net margin is 0.87% and gross margin is a mere 6.54% — extraordinarily low even for a protein processor, where gross margins typically run in the low-to-mid teens. Gross margin has oscillated violently: 7.05% in Q2 FY2026, 5.73% in Q1 FY2026, 5.24% in Q4 FY2025, and 8.22% in Q3 FY2025, reflecting commodity input cost swings. Operating income of $435 million (3.19% operating margin) and EBITDA of $796 million (5.83% EBITDA margin) show the business is profitable but operating on very thin cushions, with interest expense of $97 million consuming a meaningful 22% of operating income.
The balance sheet is the relative bright spot. Debt-to-equity of 0.488 is moderate, the current ratio of 1.552 indicates adequate liquidity, and TTM free cash flow of $1.227 billion provides real cash generation. However, the most recent quarter showed negative operating cash flow of -$113 million and negative free cash flow of -$258 million, a sharp reversal from Q1's +$942 million operating cash flow, driven by a $313 million working capital drain. ROE of 2.62% and ROA of 2.57% are extremely low, and the payout ratio of 147% means the 3.70% dividend yield is not covered by earnings — a sustainability concern that management will need to address if the beef cycle does not improve.
Quarterly Revenue
$13.7B
2026-03
Revenue YoY Growth
+4.4%
YoY Comparison
Gross Margin
7.0%
Latest Quarter
Free Cash Flow
$1.2B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is TSN Overvalued?
Because Tyson's trailing net income is positive but negligible (EPS of $0.025), the trailing PE of 39.85x is distorted and not analytically useful; the more informative metric is the forward PE of 12.69x, which reflects the market's expectation of a sharp earnings recovery. The gap between trailing PE (39.85x) and forward PE (12.69x) implies the market expects earnings to roughly triple, consistent with analyst estimated EPS of $6.59 versus trailing EPS of $0.025 — a massive projected rebound that hinges on beef margin normalization and continued chicken/prepared foods strength. The PS ratio of 0.346 and EV/Sales of 0.464 are low in absolute terms, reflecting the commodity nature of the business.
Against the broader Consumer Defensive sector, Tyson trades at a significant discount on most metrics. The PS ratio of 0.346 is well below the sector's typical 1.0-1.5x range for branded food companies, and the PB ratio of 1.043 is near book value — a level that signals the market assigns little premium to Tyson's asset base. The EV/EBITDA of 10.26x is moderate but not cheap for a low-margin processor, and the PEG ratio of -0.97 is negative and therefore meaningless given the earnings volatility. The discount to peers is partially justified by Tyson's inferior gross margin (6.54% vs. the 25-35% typical for branded consumer staples) and its commodity price exposure, but the forward PE of 12.69x versus a sector average in the high teens suggests the market is pricing in substantial execution risk on the recovery.
Historically, Tyson's valuation has compressed dramatically. The PE ratio has ranged from 5.18x (Q4 FY2021) to 96.77x (Q4 FY2025), and the PS ratio has fallen from 2.24x in Q4 FY2021 to 0.346 currently — a decline of roughly 85%. The PB ratio of 1.043 is near the low end of its historical range (0.96x to 1.73x), and the dividend yield of 3.70% is at the high end of its historical band (0.50% to 0.95% in FY2021-2022), reflecting the price decline rather than a dividend increase. The current valuation sits near multi-year lows on PS and PB, which could represent a value opportunity if the beef cycle turns, but the compressed multiples also reflect genuine fundamental deterioration in margins and returns.
PE
39.8x
Latest Quarter
vs. Historical
Mid-Range
5-Year PE Range 5x~97x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
10.3x
Enterprise Value Multiple
Investment Risk Disclosure
Financial and operational risks are substantial. The company's gross margin of 6.54% is extraordinarily low for a food processor, leaving minimal buffer against commodity cost swings. The payout ratio of 147% indicates the dividend is not covered by earnings, and the most recent quarter showed negative free cash flow of -$258 million, a sharp reversal from positive $942 million in the prior quarter. Interest expense of $97 million consumes 22% of operating income, adding further strain. Additionally, revenue is concentrated in beef (30% of sales) and chicken (40%), making the company vulnerable to disease outbreaks, feed costs, and supply chain disruptions.
Market and competitive risks are elevated. The stock trades at a forward PE of 12.69x, which is below the sector average, but this discount may be justified by inferior margins and commodity exposure. The beta of 0.371 indicates low market correlation, but the stock has underperformed the S&P 500 by 21.75% over the past year, highlighting idiosyncratic weakness. Regulatory risks include potential changes in agricultural policies, trade tariffs, and labor regulations. Competitive pressures from other protein producers and alternative proteins could erode market share, especially in prepared foods where Tyson lacks dominant brands.
A worst-case scenario would involve a prolonged cattle shortage, continued margin compression, and a dividend cut. If beef margins remain depressed and chicken prices soften, earnings could fail to recover, leading to a breakdown below the 52-week low of $50.56. The analyst low target of $56.00 is actually above the current price, but in a severe downturn, the stock could retest its 52-week low, implying a downside of about -4.6% from the current price. However, if the dividend is cut and sentiment worsens, the stock could fall further, potentially to the $45-$50 range, representing a decline of 6-15% from current levels. The max drawdown of -25.21% from the peak shows the stock's vulnerability in adverse conditions.
FAQ
The key risks include: 1) Dividend sustainability risk, as the payout ratio of 147% means earnings do not cover the dividend, and a cut could trigger a sell-off. 2) Margin compression risk, with gross margin at only 6.54% and net margin at 0.87%, leaving little buffer for cost inflation. 3) Beef segment structural risk, as the U.S. cattle herd is at 1951 levels, driving record beef prices and pressuring margins. 4) Competitive risk in prepared foods, where Tyson lacks dominant brands and faces intense competition. 5) Macro risk, although the low beta of 0.371 reduces market correlation, a recession could dampen demand for higher-priced proteins. The most severe risk is a dividend cut, which could cause the stock to retest its 52-week low of $50.56.
The 12-month forecast has three scenarios: Bull case (25% probability) targets $65-$76, assuming beef margin recovery and dividend sustainability. Base case (50% probability) targets $56-$65, assuming modest earnings recovery and stable dividend. Bear case (25% probability) targets $45-$56, assuming prolonged cattle shortage and a dividend cut. The base case is most likely, with the stock trading in a range between the analyst low target of $56 and average target of $65. The key assumption is that beef margins stabilize at current low levels while chicken and prepared foods continue to grow. However, the wide target range reflects low conviction, and the stock could remain range-bound until there is clearer evidence of a cyclical turn.
TSN appears undervalued on most metrics. The forward PE of 12.69x is below the Consumer Defensive sector's typical high-teens multiple, and the PS ratio of 0.346 is near multi-year lows, down about 85% from its Q4 FY2021 level of 2.24x. The PB ratio of 1.043 is close to book value, and the dividend yield of 3.70% is at the high end of its historical range. However, this discount is partially justified by Tyson's inferior gross margin of 6.54% compared to the 25-35% typical for branded consumer staples, and its commodity price exposure. The market is pricing in substantial execution risk on the earnings recovery, as evidenced by the wide analyst target range of $56-$76. If the beef cycle turns, the stock could re-rate significantly, but if headwinds persist, the low valuation may be a value trap.
TSN is not a clear buy at current levels. While the stock trades at a forward PE of 12.69x, well below the sector average, and offers a 3.70% dividend yield, the payout ratio of 147% indicates the dividend is not covered by earnings. The analyst consensus is Hold with an average target of $65.08, implying 22.8% upside, but the stock is in a persistent downtrend and has underperformed the S&P 500 by 21.75% over the past year. The biggest downside risk is a dividend cut or a prolonged beef shortage, which could push the stock below its 52-week low of $50.56. For risk-tolerant investors seeking deep value and income, a small position could be justified, but timing is uncertain. A better entry point might be after evidence of beef margin recovery or a sustainable dividend.
TSN is more suitable for long-term investment, given its defensive characteristics, low beta of 0.371, and dividend yield of 3.70%. The company is in a cyclical trough, and a recovery in beef margins could take several years as the cattle herd rebuilds. Short-term trading is risky due to the persistent downtrend and lack of near-term catalysts. The stock's low volatility makes it less appealing for short-term traders seeking quick gains. A minimum holding period of 2-3 years is suggested to allow for the beef cycle to turn and for the company to demonstrate sustainable earnings growth. However, investors should monitor the dividend closely, as a cut could alter the investment thesis.