Tyson Foods, Inc. (TSN) | Investment Case

1. Company Snapshot

1.a. Company Description

Tyson Foods, Inc., together with its subsidiaries, operates as a food company worldwide.It operates through four segments: Beef, Pork, Chicken, and Prepared Foods.The company processes live fed cattle and live market hogs; fabricates dressed beef and pork carcasses into primal and sub-primal meat cuts, as well as case ready beef and pork, and fully cooked meats; raises and processes chickens into fresh, frozen, and value-added chicken products; and supplies poultry breeding stock; sells specialty products, such as hides and meats.

It also manufactures and markets frozen and refrigerated food products, including ready-to-eat sandwiches, flame-grilled hamburgers, Philly steaks, pepperoni, bacon, breakfast sausage, turkey, lunchmeat, hot dogs, flour and corn tortilla products, appetizers, snacks, prepared meals, ethnic foods, side dishes, meat dishes, breadsticks, and processed meats under the Jimmy Dean, Hillshire Farm, Ball Park, Wright, State Fair, Aidells, and Gallo Salame brands.The company also offers its products under Tyson and ibp brands.It sells its products through its sales staff to grocery retailers, grocery wholesalers, meat distributors, warehouse club stores, military commissaries, industrial food processing companies, chain restaurants or their distributors, live markets, international export companies, and domestic distributors who serve restaurants and food service operations, such as plant and school cafeterias, convenience stores, hospitals, and other vendors, as well as through independent brokers and trading companies.

The company was founded in 1935 and is headquartered in Springdale, Arkansas.

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1.b. Last Insights on TSN

Tyson Foods' recent performance was driven by strong institutional buying, with notable increases in holdings by Compass Wealth Management LLC (260.3%), Chicago Partners Investment Group LLC (125.6%), and D.A. Davidson & CO. (292.9%). Additionally, the company's Q1 earnings, although missing estimates, were expected to exceed market returns, as indicated by its closing price of $61.12 on January 23, representing a 1.88% shift from the previous trading day. Furthermore, the company's competitive scale and processing capacity position it to capitalize on beef market normalization and herd rebuilding post-2027, supporting margin expansion in the Chicken segment.

1.c. Company Highlights

Last Price	64.76
Change Percentage	-1.49%
Open	65.23
Previous Close	65.74
Market Cap ( Millions)	23073
Volume	3782512
Year High	66.15
Year Low	50.56
M A 50	58.88
M A 200	56.11

FCF Yield	4.80%
Dividend Yield	3.10%
ROE	1.10%
Debt / Equity	46.40%
Net Debt / EBIDTA	316.25%
Price To Book	1.24
Price Earnings Ratio	111.71
Price To FCF	20.84
Price To sales	0.42
EV / EBITDA	13.46

2. Tyson Foods' Strong Q4 2025 Earnings: A Closer Look

Tyson Foods reported a robust financial performance in Q4 2025, with revenues, adjusted operating income, and adjusted earnings per share all showing significant increases. The company's adjusted EPS came in at $1.15, beating analyst estimates of $0.84. The Chicken segment was a standout, with $457 million in adjusted operating income, driven by higher volumes, better operational execution, and lower feed costs. The company's financial position remains strong, with a net leverage of 2.1x and free cash flow of $1.2 billion.

Publication Date: Dec -25

                                    📋 Highlights
                                    Chicken Segment Growth:
                                                Achieved $457 million in adjusted operating income driven by higher volumes, operational efficiency, and lower feed costs.
Prepared Foods Performance:
                                                Sales increased 3% with a 7.4% adjusted operating margin, bolstered by 10.3% lunch meat growth and strategic pricing.
Strong Financial Position:
                                                $1.2 billion free cash flow in 2025, net leverage of 2.1x, and $893 million returned to shareholders via dividends and buybacks.
Beef Segment Challenges:
                                                Expected 2026 adjusted operating income loss of $600–$400 million due to cattle availability issues and volume declines (-8.4% Q4, -1.9% full year).
2026 Outlook:
                                                Guidance for $2.1–$2.3 billion adjusted operating income, with Chicken projected at $1.25–$1.5 billion and Pork at $150–$250 million.

                                

Segment Performance

The Prepared Foods segment saw growth in sales and adjusted operating income, with a 3% sales increase and a 7.4% adjusted operating margin. The Beef segment, however, faced challenges, with cattle availability remaining a constraint, and volume down 8.4% for the quarter and 1.9% for the full year. The company's guidance for 2026 expects sales growth of 2-4%, with adjusted operating income between $2.1 billion and $2.3 billion.

Outlook and Guidance

Tyson Foods expects the Chicken segment to continue its strong performance in 2026, with operating income projected to be between $1.25 billion and $1.5 billion. The company is also optimistic about its Prepared Foods segment, expecting volume growth, market share growth, and top and bottom-line growth. However, the Beef segment is expected to face a challenging environment, with heifer retention signs indicating potential less beef in the near term.

Valuation and Metrics

With a P/E Ratio of 42.77 and an EV/EBITDA of 11.01, Tyson Foods' valuation appears to be reflecting its strong financial performance. The company's Dividend Yield of 3.45% and Free Cash Flow Yield of 5.66% also indicate a attractive return profile for investors. Additionally, the company's ROIC of 2.32% and ROE of 2.59% suggest that it is generating returns on its invested capital.

Key Uncertainties

The company faces several key uncertainties in 2026, including consumer spending patterns, commodity prices, and the impact of the delay and disruption in SNAP benefit payouts. However, Tyson Foods feels resilient and well-positioned to navigate these challenges with its diverse product portfolio and strong market presence.

Operational Highlights

The company has made significant progress in improving its execution across all businesses, with a focus on driving returns on invested capital and creating shareholder value. The chicken business is expected to see price appreciation driven by consumer demand for affordable protein, and the company sees significant upside and improvement across the landscape. Analysts estimate next year's revenue growth at 1.8%, indicating a stable outlook for the company.

3. NewsRoom

The U.S. Government Just Told 340 Million Americans to Eat More of What Tyson Foods Sells

18:50

Source: fool.com

Why Tyson Foods Looks Like a Tasty Treat for Income Investors Right Now

Feb -02

Source: marketbeat.com

Tyson Foods Inc (TSN) Q1 2026 Earnings Call Highlights: Strong Sales Growth Amid Beef Segment Challenges

Feb -02

Source: gurufocus.com

Tyson Foods, Inc. (TSN) Q1 2026 Earnings Call Transcript

Feb -02

Source: seekingalpha.com

Tyson Foods Q1 Earnings Miss Estimates, Sales Grow 5.1% Y/Y

Feb -02

Source: zacks.com

Tyson Foods Reports Q1 Revenue Growth and Reaffirms FY26 Guidance

Feb -02

Source: gurufocus.com

Tyson Foods Q1 earnings beat estimates as chicken demand offsets beef weakness

Feb -02

Source: proactiveinvestors.com

Tyson Foods: Fairly Valued Given Slow Recovery In Beef (Downgrade)

Feb -02

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.90%)

6. Segments

Beef

Expected Growth: 1.8%

Tyson Foods' beef segment growth of 1.8% is driven by increasing demand for protein-rich foods, strategic acquisitions, and expansion into international markets. Additionally, the company's focus on premium products, such as organic and grass-fed beef, contributes to growth. Furthermore, Tyson's efforts to improve operational efficiency and reduce costs also support the segment's growth.

Chicken

Expected Growth: 1.9%

Tyson Foods' chicken segment growth of 1.9% is driven by increasing demand for protein-rich food, rising exports to countries like China and Mexico, and strategic acquisitions. Additionally, the company's focus on value-added products, such as organic and premium chicken, contributes to growth. Furthermore, Tyson's efforts to improve operational efficiency and reduce costs also support the segment's expansion.

Prepared Foods

Expected Growth: 2.1%

Tyson Foods' Prepared Foods segment growth of 2.1% is driven by increasing demand for convenient, protein-rich meals, and strategic acquisitions expanding product offerings. Additionally, investments in e-commerce and digital marketing enhance customer engagement, while operational efficiencies and cost savings initiatives support margin expansion.

Pork

Expected Growth: 1.7%

Tyson Foods' pork segment growth of 1.7% is driven by increasing demand for protein-rich foods, strategic acquisitions, and expansion into international markets. Additionally, the company's focus on premium products, such as organic and antibiotic-free offerings, contributes to growth. Furthermore, efficient production and supply chain management enable Tyson to maintain a competitive edge in the market.

International/Other

Expected Growth: 2.2%

Tyson Foods' International/Other segment growth of 2.2% is driven by increasing demand for protein-rich foods in emerging markets, particularly in Asia and Latin America. Additionally, strategic acquisitions and partnerships have expanded the company's global footprint, while investments in e-commerce and digital platforms have enhanced customer reach and convenience.

Reconciling Items

Expected Growth: 2.0%

Tyson Foods, Inc.'s 2.0% growth is driven by increasing demand for protein-rich foods, expansion into international markets, and strategic acquisitions. Additionally, the company's focus on innovation, operational efficiency, and cost savings initiatives have contributed to its growth. Furthermore, the rising trend of online food delivery and meal kits has also boosted sales.

7. Detailed Products

Chicken

Tyson Foods is one of the largest chicken producers in the world, offering a wide range of chicken products including fresh, frozen, and value-added chicken.

Beef

Tyson Foods offers a variety of beef products, including fresh, frozen, and value-added beef, as well as case-ready beef products.

Pork

Tyson Foods produces a range of pork products, including fresh, frozen, and value-added pork, as well as case-ready pork products.

Prepared Foods

Tyson Foods offers a variety of prepared foods, including frozen meals, sandwiches, and snacks.

Sausages

Tyson Foods produces a range of sausage products, including breakfast sausage, Italian sausage, and Chorizo.

Meat Snacks

Tyson Foods offers a variety of meat snacks, including jerky, sticks, and bites.

Pet Treats

Tyson Foods produces a range of pet treats, including jerky strips, biscuits, and chews.

8. Tyson Foods, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Tyson Foods, Inc. faces moderate threat from substitutes due to the availability of alternative protein sources such as plant-based meat alternatives and seafood.

Bargaining Power Of Customers

Tyson Foods, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong brand portfolio and wide distribution network make it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

Tyson Foods, Inc. faces moderate bargaining power from suppliers due to the concentration of suppliers in the agricultural industry. However, the company's large scale of operations and long-term contracts with suppliers mitigate this risk.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the meat processing industry, including significant capital requirements, regulatory hurdles, and the need for specialized expertise.

Intensity Of Rivalry

The meat processing industry is highly competitive, with several large players competing for market share. Tyson Foods, Inc. faces intense rivalry from competitors such as JBS, Cargill, and Sanderson Farms.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	34.39%
Debt Cost	3.95%
Equity Weight	65.61%
Equity Cost	7.58%
WACC	6.33%
Leverage	52.42%

11. Quality Control: Tyson Foods, Inc. passed 2 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Cal-Maine Foods

A-Score: 7.5/10

Value: 8.5

Growth: 9.4

Quality: 7.8

Yield: 10.0

Momentum: 3.0

Volatility: 6.0

1-Year Total Return ->

CHS

A-Score: 6.7/10

Value: 6.3

Growth: 5.2

Quality: 3.6

Yield: 10.0

Momentum: 5.0

Volatility: 10.0

1-Year Total Return ->

Bunge

A-Score: 6.3/10

Value: 8.6

Growth: 5.6

Quality: 3.9

Yield: 6.0

Momentum: 7.0

Volatility: 7.0

1-Year Total Return ->

Ingredion

A-Score: 6.2/10

Value: 7.2

Growth: 6.6

Quality: 6.1

Yield: 6.0

Momentum: 1.5

Volatility: 10.0

1-Year Total Return ->

Laureate Education

A-Score: 6.2/10

Value: 2.9

Growth: 5.6

Quality: 6.0

Yield: 5.0

Momentum: 10.0

Volatility: 7.7

1-Year Total Return ->

Tyson Foods

A-Score: 5.2/10

Value: 5.5

Growth: 2.9

Quality: 3.7

Yield: 7.0

Momentum: 3.0

Volatility: 9.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

2.00%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.33%

Tyson Foods, Inc. - US9024941034

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on TSN

1.c. Company Highlights

Lower Quality

Average Growth

Medium Volatility

Earnings Beats

Lower Growth

Less Volatile

Revenues Beats

Average Yield

Average Quality

Revenues Miss

Higher Yield

Stable Momentum

2. Tyson Foods' Strong Q4 2025 Earnings: A Closer Look

Segment Performance

Outlook and Guidance

Valuation and Metrics

Key Uncertainties

Operational Highlights

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.90%)

6. Segments

Beef

Expected Growth: 1.8%

Chicken

Expected Growth: 1.9%

Prepared Foods

Expected Growth: 2.1%

Pork

Expected Growth: 1.7%

International/Other

Expected Growth: 2.2%

Reconciling Items

Expected Growth: 2.0%

7. Detailed Products

Chicken

Beef

Pork

Prepared Foods

Sausages

Meat Snacks

Pet Treats

8. Tyson Foods, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Tyson Foods, Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

64.76$

12.e Scoring ^Insights

12.f DCF ^BETA