Tyson Foods ( NYSE: TSN ) shares fell shortly after Wednesday’s market open after catching a fresh downgrade from Cleveland Research.
The firm warned that consensus estimates for full-year EPS are overly optimistic. While chicken is expected to be a “bright spot”, both pork and beef are anticipated to disappoint with margins becoming compressed and sales likely to come in below Wall Street expectations.
As such, the stock was downgraded from a “Buy” to “Neutral” on the basis of the firm’s own trimmed forecasts.
“Our revised forecast reflects a weaker-than-expected seasonal increase in demand for middle meats (steaks) as our research suggests consumers have continued to remain more focused on value-oriented items,” the downgrade explained.
To be sure, the note stopped short of advising a “Sell” as longer term prospects balance the near term headwinds.
“Our more cautious view on beef prices is largely offset by improved [second half of fiscal year 2022] cattle availability and stronger-than-expected by-product prices on items such as hides and tallows,” the note concluded.
Shares of Tyson Foods ( TSN ) fell 2.1% shortly after Wednesday’s market open.
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Tyson stock ticks lower as Cleveland Research warns on red meat margins