Tyson Foods Inc (TSN, Financial), a leading name in the consumer packaged goods industry, has recently seen a notable uptick in its stock performance. With a current market capitalization of $21.3 billion, the company's stock price stands at $59.97. Over the past week, Tyson Foods has experienced a 2.49% gain, while the past three months have been even more impressive, with a 19.72% increase in stock price. According to GuruFocus's valuation metrics, Tyson Foods is currently significantly undervalued, with a GF Value of $86.57, down slightly from the past GF Value of $87.34. This suggests that the stock may have room to grow, maintaining its status as significantly undervalued both currently and in the past valuation.
Overview of Tyson Foods Inc
Tyson Foods Inc, operating within the competitive consumer packaged goods sector, is a protein-focused food producer known for its raw and prepared food products. The company's portfolio includes popular brands such as Tyson, Jimmy Dean, Hillshire Farm, Ball Park, and Sara Lee. Despite the fierce competition in the market, Tyson Foods has managed to maintain a strong presence, with chicken and beef segments each accounting for about one-third of U.S. sales and prepared foods making up roughly 20%. Although international sales only represent a small fraction of total revenue, Tyson Foods has been actively expanding through acquisitions, particularly in international and food-service markets.
Assessing Tyson Foods' Profitability
Tyson Foods' financial health is reflected in its Profitability Rank of 7/10, indicating a strong position within the industry. The company's operating margin stands at 0.73%, which is better than 29.35% of 1850 companies in the same sector. However, the Return on Equity (ROE) is currently at -3.39%, and the Return on Assets (ROA) is at -1.77%, both metrics showing room for improvement. The Return on Invested Capital (ROIC) at 1.14% is better than 34.81% of its peers. Over the past decade, Tyson Foods has maintained profitability for 9 years, outperforming 66.48% of 1766 companies. These figures suggest that while Tyson Foods is profitable, there is potential for enhanced financial performance.
Growth Trajectory of Tyson Foods
The Growth Rank for Tyson Foods is a solid 6/10. The company has demonstrated a 3-Year Revenue Growth Rate per Share of 8.10%, surpassing 54.36% of 1720 companies. The 5-Year Revenue Growth Rate per Share is also strong at 7.20%, better than 60.13% of 1555 companies. However, the future outlook, with a Total Revenue Growth Rate estimate of 1.39% for the next 3 to 5 years, suggests a more modest expansion, still better than 27.31% of the industry. The 3-Year EPS without NRI Growth Rate has seen a significant decline at -65.00%, and the 5-Year EPS without NRI Growth Rate is at -36.00%. The estimated EPS Growth Rate for the next 3 to 5 years is 1.46%, indicating a cautious optimism for future earnings growth.
Key Shareholders in Tyson Foods
Notable investors have taken significant positions in Tyson Foods, demonstrating confidence in the company's prospects. Richard Pzena (Trades, Portfolio) holds the largest stake with 5,440,820 shares, representing 1.53% of the company. Yacktman Asset Management (Trades, Portfolio) follows with 3,022,422 shares, accounting for 0.85%, and T Rowe Price Equity Income Fund (Trades, Portfolio) holds 2,700,000 shares, or 0.76%. These major holders reflect a strong institutional interest in Tyson Foods' performance and future.
Competitive Landscape
When compared to its competitors, Tyson Foods holds a substantial market cap of $21.3 billion. Bunge Global SA (BG, Financial) has a market cap of $13.01 billion, Archer-Daniels Midland Co (ADM, Financial) is valued at $28.71 billion, and Cal-Maine Foods Inc (CALM, Financial) stands at $2.76 billion. Tyson Foods' market cap situates it comfortably within its competitive set, reflecting its significant role in the consumer packaged goods industry.
Conclusion: Tyson Foods' Market Position and Future Outlook
In summary, Tyson Foods Inc has demonstrated a strong stock performance with a 19.72% gain over the past three months, and it remains significantly undervalued according to the GF Value. The company's profitability metrics, while mixed, show a stable foundation with a high Profitability Rank. Growth prospects are moderate, with a solid historical revenue growth but a more conservative future earnings outlook. The presence of significant shareholders and a competitive market cap relative to its peers further solidify Tyson Foods' position in the market. As investors and analysts continue to monitor Tyson Foods' trajectory, the company's strategic initiatives and market dynamics will play a crucial role in shaping its future performance.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
