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Category: Stock Market and Tyson Foods
Date: 4 May 2020 Stock Price: $55.19 We take a look at the 2nd quarter 2020 earnings report of Tyson Foods, one of the world's largest food companies with brands such as Jimmy Dea, Wright and State Fair. Market punishing its stock after the release of its 2nd quarter 2020 earnings report.
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About Tyson Foods
Tyson Foods, Inc. (NYSE: TSN) is one of the world’s largest food companies and a recognized leader in protein. Founded in 1935 by John W. Tyson and grown under three generations of family leadership, the company has a broad portfolio of products and brands like Tyson®, Jimmy Dean®, Hillshire Farm®, Ball Park®, Wright®, Aidell’s®, ibp® and State Fair®. Tyson Foods innovates continually to make protein more sustainable, tailor food for everywhere it’s available and raise the world’s expectations for how much good food can do. Headquartered in Springdale, Arkansas, the company had 121,000 team members at September 29, 2018. Through its Core Values, Tyson Foods strives to operate with integrity, create value for its shareholders, customers, communities and team members and serve as a steward of the animals, land and environment entrusted to it.
Financial overview of Tyson Foods' 2nd quarter 2020 earnings report
The data below refers to the latest quarter unless specified otherwise
- Sales: $10.888 billion (up from $10.443 billion for the same quarter of the previous year)
- Sales increased by 4.3% over the last 12 months
- Cost of sales: $9.867 billion (up from $9.251 billion for the same quarter of the previous year)
- Cost of sales increased by 6.7% over the last 12 months.
- Net income: $367 million (down from $430 million for the same quarter of the previous year)
- Diluted income per share: $1.00 (down from $1.17 for the same quarter of the previous year)
- PE ratio of Tyson Foods: 22.3
- Dividend declared: $0.378
- Dividend yield of Tyson Foods: 2.8%
- Diluted weighted number of shares outstanding: 364 million (down from 426 million for the same quarter of the previous year)
- Cash and cash equivalents: $437 million
- Cash and cash equivalents per share: 1.20
- Cash and cash equivalents makes up 2.17% of Tyson Foods' market capital
- Cash and cash equivalents makes up 1.29% of Tyson Foods' total assets
- Receivables, net: $2.248 billion
- Receivables makes up 6.6% of Tyson Foods' total assets
- Inventories: $4.025 billion
- Inventories makes up 11.9% of Tyson Foods' total assets
- Stockholders equity in Tyson Foods: $14.594 billion
- Stockholders equity per share in Tyson Foods: $40.09
- Tyson Foods is trading at 1.37 times its stockholders equity which is outside the expected range of between 2 and 4 times that most firms tend to trade at
- For perspective the average firm in the S&P 500 trades at 3.34 times its book value. Read more about the S&P 500 here.
- Cash generated from operations: $1.260 billion
- Cash generated from operations per share : $3.46
Tyson Foods (NYSE:TSN) management commentary on their 2nd quater 2020 earnings
Springdale, Arkansas – May 4, 2020 – Tyson Foods, Inc. (NYSE: TSN), one of the world’s largest food companies and a recognized leader in protein with leading brands including Tyson, Jimmy Dean, Hillshire Farm, Ball Park, Wright, Aidells, ibp and State Fair, today reported the following results:
First Six Months Highlights
First Six Months Highlights
- GAAP EPS of $2.52, down 6% from prior year; Adjusted EPS of $2.43, down 13% from prior year
- GAAP operating income of $1,327 million; Adjusted operating income of $1,395 million
- Total Company GAAP operating margin of 6.1% and Adjusted operating margin of 6.4%
- Record Beef GAAP operating margin of 6.6% and record Adjusted operating margin of 6.9%
- Record total Company sales of $21,703 million Second Quarter Highlights
- GAAP EPS of $1.00, down 15% from prior year; Adjusted EPS of $0.77, down 36% from prior year
- GAAP and Adjusted operating income of $501 million
- Total Company GAAP and adjusted operating margin of 4.6%
- Record total Company sales of $10,888 million
- Secured $1.5 billion term loan facility
“While we cannot anticipate how long the challenges presented by COVID-19 will persist, we remain focused on driving long-term growth. Our solid balance sheet, ample liquidity, scale and diversity continue to give us confidence in our long-term outlook.”
Tyson Foods (NYSE:TSN) stock price history
The image below obtained from Google, shows the stock price history of Tyson Foods (NYSE:TSN) for the last 5 years. Its been a pretty good time for Tyson stockholders over the last 5 years. 5 years ago the stock of Tyson was trading at $42.20 and its currently trading at $55.19 a stock. That's an ok return of 30.7% provided to Tyson Foods stockholders over the last 5 years.
Tyson Foods' stock is trading at a lot closer to its 52 week high of $94.11 than it is to its 52 week low of $49.77 which to us is a clear indication that the short term sentiment and momentum of Tyson Foods' stock is very positive.
Tyson Foods' stock is trading at a lot closer to its 52 week high of $94.11 than it is to its 52 week low of $49.77 which to us is a clear indication that the short term sentiment and momentum of Tyson Foods' stock is very positive.
Recent Google search trends for Tyson foods stock and TSN stock price
The graphic below shows the trend in searches for Tyson food stock price and TSN stock price over the last 12 months in the United States as obtained from Google Trends.
Recent coverage of Tyson Foods
The extract below covers the latest regarding Tyson Foods as obtained from TheStreet.com
Tyson Foods (TSN) fell far short of fiscal Q2 forecasts early Monday, a week after issuing a dire warning about the coronavirus hitting the supply chain for meat.
Tyson Foods EarningsEstimates: Wall Street expected Tyson Foods earnings per share to edge up 0.8% to $1.20 as revenue grows 11.5% to $11.64 billion, according to Zacks Investment Research.
Results: EPS of 77 cents on revenue of $10.89 billion.
Outlook: Sales volume increases in retail haven't offset the losses in foodservice from coronavirus, and Tyson sees overall decreases in the second half of fiscal 2020.
Tyson expects cattle supplies to increase 2% this year and "ample supplies in regions where we operate our plants and for profitability to remain strong" for the rest of the year. Pork supplies are expected to increase 5% with livestock costs down and export markets more available later this year.
Management sees chicken production coming in lower than USDA projections for a 3%-4% increase and doesn't see greater demand in consumer products completely offsetting the decrease in foodservice.
Stock: Shares fell 6% to 56.31 on the stock market today. Fake meat maker Beyond Meat (BYND), which reports Tuesday, lost 0.4%. Hormel (HRL) dipped 0.2%, and Pilgrim's Pride (PPC) fell 2%.
Read the full article here
Tyson Foods (TSN) fell far short of fiscal Q2 forecasts early Monday, a week after issuing a dire warning about the coronavirus hitting the supply chain for meat.
Tyson Foods EarningsEstimates: Wall Street expected Tyson Foods earnings per share to edge up 0.8% to $1.20 as revenue grows 11.5% to $11.64 billion, according to Zacks Investment Research.
Results: EPS of 77 cents on revenue of $10.89 billion.
Outlook: Sales volume increases in retail haven't offset the losses in foodservice from coronavirus, and Tyson sees overall decreases in the second half of fiscal 2020.
Tyson expects cattle supplies to increase 2% this year and "ample supplies in regions where we operate our plants and for profitability to remain strong" for the rest of the year. Pork supplies are expected to increase 5% with livestock costs down and export markets more available later this year.
Management sees chicken production coming in lower than USDA projections for a 3%-4% increase and doesn't see greater demand in consumer products completely offsetting the decrease in foodservice.
Stock: Shares fell 6% to 56.31 on the stock market today. Fake meat maker Beyond Meat (BYND), which reports Tuesday, lost 0.4%. Hormel (HRL) dipped 0.2%, and Pilgrim's Pride (PPC) fell 2%.
Read the full article here
Tyson Foods (NYSE:TSN) stock valuation
So what do we value Tyson Foods stock at after the release of their 1st quarter 2020 earnings report? Based on their 1st quarter 2020 earnings report our valuation model provides a target price (full value price) for Tyson Foods stock at $65.90 a stock.
We therefore believe the stock of Tyson Foods is undervalued at its current price. We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which in this case is $65.90. A good entry point into Tyson Foods would therefore be at $59.30 or below. We expect the stock of Tyson Foods to kick up from current levels to levels closer to our target price in coming weeks and months.
We therefore believe the stock of Tyson Foods is undervalued at its current price. We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target (full value) price which in this case is $65.90. A good entry point into Tyson Foods would therefore be at $59.30 or below. We expect the stock of Tyson Foods to kick up from current levels to levels closer to our target price in coming weeks and months.
Next earnings release of Tyson Foods
It is expected that Tyson Foods will release their 1st quarter 2020 earnings report in mid February 2020