What Happened?
Shares of meat company Tyson Foods (NYSE: TSN) jumped 4.7% in the afternoon session after the company reported strong fiscal third-quarter results that surpassed analyst expectations. The meat processing giant posted revenue of approximately $13.9 billion, a 4% increase from the same period last year, which topped market forecasts. The company's adjusted earnings per share landed at $0.91, also beating consensus estimates and improving from the prior year. Strong consumer demand for its chicken and packaged food products fueled the positive performance.
After the initial pop the shares cooled down to $54.94, up 4.6% from previous close.
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What Is The Market Telling Us
Tyson Foods’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 9 months ago when the stock gained 10% on the news that the company reported strong third-quarter results that blew past analysts' gross margin and EBITDA expectations, while sales also exceeded expectations by a whisker. In addition, its operating profit guidance for 2025 outperformed Wall Street's estimates. It appears the near-term top line outlook has some macro underpinnings with the company citing the United States Department of Agriculture (USDA) data which revealed domestic protein production (beef, pork, chicken, and turkey) should increase compared to fiscal 2024 levels. The modest demand forecast informed the company's expectations for sales to be down 1% to flat in fiscal 2025. However, the strong pricing contribution to growth is more than likely to continue, with full-year adjusted operating income expected to be roughly $2.0 billion at the midpoint, ahead of analysts' estimates. Zooming out, we think this was a solid quarter, highlighting management's continued efforts to balance sales and profitability.
Tyson Foods is down 5.5% since the beginning of the year, and at $54.94 per share, it is trading 16.6% below its 52-week high of $65.87 from September 2024. Investors who bought $1,000 worth of Tyson Foods’s shares 5 years ago would now be looking at an investment worth $843.67.
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