Back to top

Analyst Blog

Tyson Foods Inc. (TSN - Analyst Report) is set to report its fiscal 2013 first quarter results on May 6, 2013 before the opening bell. In the last quarter, the company posted a 23.1% positive surprise. Let’s see how things are shaping up for this announcement.

Factors this Past Quarter

Strong sales in Chicken and Beef segments coupled with operational efficiency helped Tyson gain a decent profit in the past quarter. Moreover, Tyson is foraying into Mexican food business with its strategic acquisition of Don Julio. This is particularly encouraging as Mexican food is gaining fast popularity in the U.S. processed food industry.

However, rising input prices, skyrocketing cattle prices and grain costs have been crippling margins for the company. Moreover, currency headwind also posed a problem for Tyson, as its major portion of business is carried overseas.

Earnings Whispers?

Our proven model does not conclusively show that Tyson Foods is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings Expected Surprise Prediction or ESP (Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.

Zacks ESP: The Most Accurate estimate stands at 44 cents while the Zacks Consensus Estimate is at 46 cents. That is a difference of -4.35%.

Zacks Rank #4 (Sell): Tyson’sZacks Rank #3 (Hold) lowers the predictive power of ESP because the Zacks Rank #3 when combined with a negative ESP makes surprise prediction difficult. We caution against stocks with Zacks Rank #4 and #5 (Sell rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions momentum.

Other Stocks to Consider

Flowers Foods, Inc.(FLO - Snapshot Report), with an Earnings ESP of +14.63% and a Zacks Rank #1 (Strong Buy)

The Hillshire Brands Co. (HSH - Snapshot Report), with an Earnings ESP of +9.38% and a Zacks Rank #2 (Buy).

Molson Coors Brewing Company(TAP - Analyst Report), with an Earnings ESP of +2.86% and a Zacks Rank #3 (Hold)

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
SYNAPTICS I… SYNA 78.11 +8.14%
GREEN PLAIN… GPRE 39.41 +5.12%
PILGRIM'S P… PPC 28.82 +3.08%
SKYWORKS SO… SWKS 52.07 +2.58%
CLAYTON WIL… CWEI 109.08 +2.51%