Tyson Foods stock prediction after reporting solid FQ4 and FY2021 results

By: Motiur Rahman
Motiur Rahman
Md Motiur enjoys researching how companies are solving challenges the world will face over the coming decades. In his… read more.
on Nov 15, 2021
  • Tyson Foods shares on Monday gained 3.7% after announcing its most recent quarterly results.
  • The company reported its FQ3 revenue and earnings before markets opened, beating analyst estimates.
  • Tyson Foods also declared a quarterly dividend per share of $0.46 in line with the previous.

On Monday, Tyson Foods Inc. (NYSE:TSN) shares gained about 3.7% after announcing its most recent quarterly results. The company reported its fiscal fourth-quarter revenue and earnings before markets opened, beating the consensus for analyst expectations. TSN also declared a quarterly dividend per share of $0.46, in line with the previous, implying a forward yield of 2.27% based on Friday’s closing price.

Tyson Foods posted FQ4 non-GAAP earnings per share of $2.30, beating the average analyst estimate of $2.22. In addition, its GAAP EPS of $3.71 was $1.51 ahead of estimates, while revenue for the quarter grew by 20.4% from the same quarter in 2020 to $12.81 billion, surpassing expectations by $120 million.

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Although Tyson Foods shares are up more than 20% over the last three months, the stock is up just over 32% this year, in line with the S&P 500 Index. Therefore, there could be room left for more upward movement.

Is Tyson Foods still undervalued?

From a valuation perspective, Tyson Foods shares trade at attractive trailing 12-month and forward P/E ratios of 13.26 and 12.08, respectively. Therefore, the stock could be a compelling option for value investors. 

On the other hand, analysts expect its earnings per share to decline by more than 11% next year, before rising at an average annual rate of about 7.5% for the next five years.

Therefore, growth investors could opt to monitor the performance before betting on the stock.

Source – TradingView

Technically, Tyson Foods shares seem to be trading within a consolidative triangle formation that is nearing an upward breakout. As a result, the stock has rallied closer to the overbought conditions of the 14-day RSI.

However, investors could still target extended gains due to its attractive valuation multiples. Therefore, they could target profits at about $87.67, or higher at $90.92, while $80.93 and $77.52 are crucial support levels.

It may not be too late to buy TSN shares

In summary, although Tyson Foods stock seems to have rallied more than 20% since August, it seems to be matching the S&P 500 Index gains, thus implying there could be more room for improvement.

Therefore, given its exciting valuation, it may not be too late to buy the stock.

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