On Wednesday, BMO Capital Markets updated its outlook on shares of Tyson Foods Inc. (NYSE:TSN), increasing the stock's price target to $62.00 from the previous $60.00, while keeping a Market Perform rating on the shares.
The adjustment follows Tyson's fiscal fourth quarter 2024 earnings per share (EPS) of $0.92, which surpassed the consensus estimate of $0.70. This performance was attributed to robust results in the Chicken and Beef segments, which helped to counterbalance weaker outcomes in the Pork and International divisions, with Prepared Foods meeting expectations.
Tyson has also set its initial guidance for fiscal year 2025, projecting an EPS in the range of approximately $3.00 to $3.90, with the consensus at $3.50. The guidance is primarily driven by the strength in the Chicken segment and increased productivity in Prepared Foods.
In light of these developments, BMO Capital has revised its EPS estimates upwards to reflect the near-term margin strength in the Chicken segment and the improved productivity in Prepared Foods.
Despite the positive adjustments, the firm reiterated its Market Perform rating, citing that while Tyson is enhancing its internal operations, the journey to normalized earnings, estimated at $6.00 to $7.00 EPS, appears to be prolonged, with risks lingering for chicken margins beyond the first quarter of fiscal year 2025.
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