Tyson Foods, Inc. (NYSE: TSN)
The stock of Tyson Foods had its second straight day of big volume buying on Monday, climbing 5.6% to a new high of $60.32 per share. The move followed Friday’s 10% gain that was fueled by record fiscal 2016 first quarter earnings and raised guidance. Tyson’s fourth quarter earnings jumped 49% year over year to $1.15 per share beating the consensus estimate of $0.87 per share. Revenue for the quarter was $9.2 billion, down 15% year over year and below consensus of $10.1 billion. Looking forward, Tyson raised its earnings forecast for the full fiscal year to $3.85 to $3.95 per share, a significant bump from street estimates of $3.63 per share. Investor’s Business Daily
CEO Comments
“Fiscal 2016 is off to a very strong start in what we expect to be another record year,” said Donnie Smith, president and chief executive officer of Tyson Foods. “Solid execution across the entire team resulted in record earnings, record operating income, record margins and record cash flows. We captured $121 million in total synergies for the quarter, with $61 million incremental to fiscal first quarter 2015.” Smith went on to say, “Record cash flows of $1.1 billion allowed for $300 million of share repurchases in the quarter. We’ve repurchased $550 million of our shares in the past two quarters, plus an additional $200 million to date in the second quarter of fiscal 2016. Given the pace of our stock buy backs, our board of directors increased our repurchase authorization by 50 million shares. Due to our strong results in the first quarter and our positive outlook on the rest of the year, we are raising our fiscal 2016 earnings guidance to $3.85 – $3.95 per share.” Globe Newswire
TSN Technical Analysis
Tyson appears to be a market darling so far in 2016 with its shares gaining 12.4% year-to-date while the S&P is down more than 9%. Interesting to note that the earnings report last November also pushed the stock to new highs on volume while the S&P was weak. This of course is not tradable info by itself, but possibly an indication that investor’s faith in both management and the category could continue to attract bulls. There is not an edge trading TSN long from these ‘price-discovery’ levels. Depending on price and volume action, there may be a bounce play on a pullback to $59.50 or $59.00 looking for an overshoot of $60.32. The next levels of support are near $58.00, $57.40 and $57.00. Below that in a bearish environment, the stock could get to $55.83 and a move into the gap.
Tyson Foods Company Profile
Tyson Foods, Inc., is a food production company. The Company’s operations are conducted in five segments: Chicken, Beef, Pork, Prepared Foods and International. Chicken, includes domestic operations related of raising and processing live chickens into fresh, frozen and value-added chicken products, and sales of allied products. Beef, includes operations related to processing live fed cattle and fabricating dressed beef carcasses into primal and sub-primal meat cuts and case-ready products. Pork, includes operations related to processing live market hogs and fabricating pork carcasses into primal and sub-primal cuts and case-ready products. Prepared Foods, includes operations related to manufacturing and marketing frozen and refrigerated food products and logistics operations of products through the supply chain. International, includes foreign operations related to raising and processing live chickens into fresh, frozen and value-added chicken products in across countries. Google Finance
