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Research Alert: CFRA Maintains Hold Opinion On Shares Of Tyson Foods, Inc.

05/10/2021 07:27

11:20 AM EDT, 05/10/2021 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We lift our 12-month target to $77 from $68 as we are now valuing the shares on FY 22 (Sep.) results. Our new target is 12.6x our FY 22 (Sep.) EPS estimate, in line with TSN's average forward P/E. We lower our FY 21 EPS estimate to $5.49 from $5.55 and FY 22's to $6.12 from $6.36. TSN posts F2Q (Mar-Q) adj-EPS of $1.34 vs. $0.80 (+68%), $0.18 above consensus but a penny above our estimate. Although overall results were largely in line with our expectations, our outlook looks gloomier as inflationary pressures from rising grain, freight, and labor costs are making for a very challenging operating environment. Rising grain costs will likely be more evident over the next few quarters as hedges roll over, while the labor issues could prolong until automation is implemented or government stimulus winds down. On the positive side, foodservice volumes are improving, which should increase manufacturing efficiencies over time. In addition, direct Covid-19 costs are coming down ($95M in Mar-Q vs. $120M in Jan-Q).