Tyson Foods ( NYSE: TSN ) post-earnings plunge has left the stock at a more reasonable level, according to Piper Sandler analyst Michael Lavery.
Shares of the Arkansas-based corporation fell over 8% on Monday after reporting shrinking operating margins , persistent supply chain issues, and softer than expected sales in beef and pork products. The results raised suspicion that consistent price increases are beginning to shift consumer behavior.
“We continue to recognize risks from consumers downtrading (both within meat and to other alternatives), and there remains risks to F23 Beef margins from short cattle supplies (as F22 herd liquidation pulls supply forward),” Lavery noted. “Consumer demand for pork is also surprisingly soft, in part from historically high prices and a stronger dollar weighing on exports.”
Yet, the steep decline for the stock on Monday has now largely priced in these problems, he told clients on Tuesday. As such, Lavery upgraded his rating on shares from a Sell-equivalent to Neutral despite lowering full-year EPS targets from $8.80 to $8.75 to $7.25 to $7.10.
He assigned a $79 price target to shares, slightly below Monday's closing price of $80.10.
Read more on the company’s earnings results reported on Monday.
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Tyson Foods upgraded at Piper Sandler despite earnings disappointment