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Tyson Foods Inc. (TSN - Free Report) is one of the biggest U.S. food companies, producing, distributing, and marketing chicken, beef, pork, and other prepared foods. The company's products are marketed and sold primarily by sales staff to grocery retailers, grocery wholesalers, meat distributors, military commissaries, industrial food processing companies, chain restaurants, international export companies and domestic distributors. Tyson’s brand portfolio includes Tyson, Jimmy Dean, and Hilshire Farm, among many others.
Q1 Earnings Impress Wall Street
Total sales rose 24% year-over-year to $12.9 billion, while adjusted operating income shot up 40% to $1.4 billion. Adjusted earnings per share climbed 48% to $2.87, easily beating the Zacks Consensus Estimate of $1.90.
Overall, the company’s gains were driven by price increases, and on average, prices for Tyson’s beef, chicken, and pork products increased 31.7%, 19.9%, and 12.8%, respectively.
Like many other businesses, Tyson said it hiked prices to offset rising expenses. The supply chain crisis, coupled with a tight labor market, led to higher wages, shipping costs, and animal feed prices.
"We're pleased with the results of the first quarter and of the steps that we are taking to improve productivity," CEO Donnie King said in a press release. "Our performance reflects the resilience of our multi-protein portfolio even with continued volatility in the marketplace."
Despite rising expenses and other challenges, Tyson’s impressive profit growth showed that the company was able to successfully navigate a difficult market environment to kick off its first quarter on a high note.
Wall Street agreed, and shares spiked over 12% following the Q1 report to close at a record high of $99.09 per share.
Can TSN Surge Higher?
Over the past six months, shares of Tyson are up about 13.6% compared to the S&P 500’s 1.4% return. Earnings estimates have been rising, and TSN is a Zacks Rank #1 (Strong Buy) right now.
For fiscal 2022, five analysts revised their bottom-line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has jumped $1.55 to $8.74 per share. Earnings are expected to grow about 5.5% compared to 2021, and sales could see growth of 9.5% to $15.6 billion for the year.
Last quarter’s strong results prompted management to issue an upbeat outlook for 2022. Tyson expects to generate as much as $51 billion in revenue for the year, which is in line with Zacks’ estimates. Additionally, the company is now targeting $1 billion in total cost savings by the end of fiscal 2024, including up to $400 million in savings this year.
Tyson also boasts a solid dividend, with an annual yield of 2.1% and payout ratio of only 20%. This indicates the company has lots of room to keep growing its dividend and reward shareholders.
All of these factors, plus TSN’s enticing 10X 12-month forward earnings multiple, could mean the stock could continue to churn higher. If you’re an investor searching for a food stock to add to your portfolio, make sure to keep TSN on your shortlist.
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Bull of the Day: Tyson Foods (TSN)
Tyson Foods Inc. (TSN - Free Report) is one of the biggest U.S. food companies, producing, distributing, and marketing chicken, beef, pork, and other prepared foods. The company's products are marketed and sold primarily by sales staff to grocery retailers, grocery wholesalers, meat distributors, military commissaries, industrial food processing companies, chain restaurants, international export companies and domestic distributors. Tyson’s brand portfolio includes Tyson, Jimmy Dean, and Hilshire Farm, among many others.
Q1 Earnings Impress Wall Street
Total sales rose 24% year-over-year to $12.9 billion, while adjusted operating income shot up 40% to $1.4 billion. Adjusted earnings per share climbed 48% to $2.87, easily beating the Zacks Consensus Estimate of $1.90.
Overall, the company’s gains were driven by price increases, and on average, prices for Tyson’s beef, chicken, and pork products increased 31.7%, 19.9%, and 12.8%, respectively.
Like many other businesses, Tyson said it hiked prices to offset rising expenses. The supply chain crisis, coupled with a tight labor market, led to higher wages, shipping costs, and animal feed prices.
"We're pleased with the results of the first quarter and of the steps that we are taking to improve productivity," CEO Donnie King said in a press release. "Our performance reflects the resilience of our multi-protein portfolio even with continued volatility in the marketplace."
Despite rising expenses and other challenges, Tyson’s impressive profit growth showed that the company was able to successfully navigate a difficult market environment to kick off its first quarter on a high note.
Wall Street agreed, and shares spiked over 12% following the Q1 report to close at a record high of $99.09 per share.
Can TSN Surge Higher?
Over the past six months, shares of Tyson are up about 13.6% compared to the S&P 500’s 1.4% return. Earnings estimates have been rising, and TSN is a Zacks Rank #1 (Strong Buy) right now.
For fiscal 2022, five analysts revised their bottom-line estimate upwards in the last 60 days, and the Zacks Consensus Estimate has jumped $1.55 to $8.74 per share. Earnings are expected to grow about 5.5% compared to 2021, and sales could see growth of 9.5% to $15.6 billion for the year.
Last quarter’s strong results prompted management to issue an upbeat outlook for 2022. Tyson expects to generate as much as $51 billion in revenue for the year, which is in line with Zacks’ estimates. Additionally, the company is now targeting $1 billion in total cost savings by the end of fiscal 2024, including up to $400 million in savings this year.
Tyson also boasts a solid dividend, with an annual yield of 2.1% and payout ratio of only 20%. This indicates the company has lots of room to keep growing its dividend and reward shareholders.
All of these factors, plus TSN’s enticing 10X 12-month forward earnings multiple, could mean the stock could continue to churn higher. If you’re an investor searching for a food stock to add to your portfolio, make sure to keep TSN on your shortlist.