Argus downgraded Tyson Foods ( NYSE: TSN ) on Tuesday, advising clients that rising inflation and a stronger dollar stand to dim the prospects for the company moving forward.
The note released on Tuesday morning downgraded shares from “Buy” to “Hold”, noting that consumers are beginning to trade down as they tighten their belts.
“In order to stretch their food dollars, U.S. customers have been purchasing less costly generic products rather than Tyson's relatively expensive goods,” the note explained. “Internationally, a strong dollar and an increase in hog prices are likely to cause pork volumes to drop.”
To be sure, the team of analysts indicated a continued belief in strong prospects for long-term protein demand and Tyson Foods’ ( TSN ) ability to capitalize on this trend. However, the near term headwinds prevent the team from maintaining a bullish rating at present.
Tyson shares fell less than 1% in premarket trading on light trading volume.
Read more on recent export/import impacts for Tyson tied to China .
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Tyson Foods downgraded at Argus amid inflation, currency concerns