Tyson Foods, Inc.

Based on a comprehensive review of Tyson Foods (TSN), the stock presents a mixed picture but leans negative due to poor fundamentals and a demanding valuation.

Technical Analysis TSN shows impressive recent momentum, significantly outperforming the market with below-average volatility. However, the stock is trading near its 52-week high, suggesting it may be technically overbought in the short term, which could limit near-term upside.

Fundamental Analysis Fundamentals reveal significant challenges. While quarterly revenue grew, profitability metrics are extremely weak, with a net margin of just 0.59% and a low ROE. The company's operational efficiency is suboptimal, though its financial health is stable with manageable debt levels. The core business appears to be struggling with margin compression.

Valuation & Risk Valuation is a major concern. With a trailing P/E near 100 and a forward P/E of nearly 60, the stock is priced for substantial future growth that its current performance does not support. The primary risk is that the company fails to meet these high earnings expectations, leading to a potential valuation correction. Market-related risk is low due to its low beta.

Recommendation Hold. While TSN's recent price momentum is strong, its weak profitability and exceptionally high valuation create significant downside risk. The current price appears to already reflect an optimistic future recovery. Investors should wait for clearer signs of sustained margin improvement and more reasonable valuation levels before considering a purchase. This is not investment advice, for reference only.

RockFlow Model Forecast: Three Scenarios for 2026

Based on the comprehensive analysis, here is a 12-month outlook for Tyson Foods (TSN):

The primary catalyst for TSN is the continuation of its recent strong price momentum, driven by market anticipation of a significant recovery in its profitability and operational efficiency. However, the outlook is clouded by significant risks, most notably the extraordinarily high valuation (P/E ~100) which prices in a dramatic earnings turnaround that its current weak fundamentals—including a net margin of just 0.59%—do not support. A failure to meet these lofty growth expectations is the key risk and could trigger a sharp valuation correction. Given the conflicting technical strength and fundamental weakness, a target price is difficult to establish, but the stock is likely to trade in a wide range, with the current level near its 52-week high representing a ceiling unless concrete margin improvements materialize.

Wall Street Consensus

Most Wall Street analysts are optimistic about Tyson Foods, Inc.'s 12-month outlook, with consensus target around $64.33, indicating expected upside potential.

Overall, TSN has investment potential but also faces challenges. Here are key factors to weigh before investing.

TSN has demonstrated strong outperformance over recent periods, significantly outpacing the broader market. The stock shows healthy momentum with moderate volatility characteristics relative to the overall market.

Over the past one and three months, TSN has delivered robust gains of 5.63% and 18.47% respectively, substantially outperforming the market by 16.62 percentage points over the three-month period. This strong relative performance indicates significant positive momentum despite the stock's relatively low beta of 0.465, suggesting it has provided strong returns with below-market volatility.

TSN currently trades near the upper end of its 52-week range at approximately 93% of the $66.41 high, positioning it closer to overbought territory. The stock remains well above its 52-week low of $50.56, having recovered substantially from its maximum drawdown of -20.51% over the past year.

Revenue & Profitability TSN demonstrated sequential revenue growth to $14.3 billion in Q1 2026 from $13.9 billion in the prior quarter, though margins remain under pressure. Profitability improved modestly with net profit margin rising to 0.59% from 0.34%, yet the gross profit margin of 5.7% reflects a challenging cost environment. Operating margins also improved to 3.0%, indicating better cost control despite persistent margin compression.

Financial Health The company maintains a moderate debt profile with a manageable debt-to-equity ratio of 0.46 and interest coverage of 4.1x. Operating cash flow trends support liquidity, with a current ratio of 1.53, though the low cash ratio of 0.21 suggests reliance on working capital efficiency. Cash flow to debt stands at 0.11, indicating adequate but not robust debt servicing capacity.

Operational Efficiency TSN exhibits modest operational efficiency with an asset turnover of 0.40 and return on equity of 0.47%, pointing to suboptimal utilization of assets and equity. Inventory turnover of 2.5 and receivables turnover of 5.9 reflect efficient working capital management. The low ROE and ROCE of 1.45% suggest room for improving capital allocation and operational execution.

Valuation Level: Tyson Foods (TSN) appears significantly overvalued based on traditional earnings metrics, with a trailing PE ratio of 97.48 and a forward PE of 59.42. While the forward multiple shows an expected improvement, it remains exceptionally high, suggesting the current stock price incorporates substantial future growth expectations that may be difficult to achieve. The elevated EV/EBITDA of 44.95 further confirms a premium valuation relative to the company's operating cash flow generation.

Peer Comparison: The analysis is limited by the absence of industry average data for a direct comparison. However, TSN's valuation multiples, particularly its high PE and EV/EBITDA ratios, are typically considered elevated for a company in the low-margin, cyclical food processing sector. Without specific industry benchmarks, it is challenging to precisely gauge its relative premium but the absolute levels indicate it is likely trading at a significant premium to peers.

Based on the provided metrics, TSN exhibits low volatility risk relative to the broader market. Its beta of 0.465 indicates the stock is significantly less volatile than the market benchmark, typically moving less than half as much. However, the one-year maximum drawdown of -20.51% demonstrates that the stock is still subject to substantial price declines from recent peaks, highlighting its exposure to downside risk despite its low beta.

Other risk factors appear muted, particularly regarding speculative pressure and trading liquidity. The absence of reported short interest suggests a lack of significant negative sentiment or active betting against the stock's near-term performance. This, combined with the company's large market capitalization, generally points to adequate market liquidity for investors.