JPMorgan assumes coverage on Tyson stock with Neutral rating

Investing.com - JPMorgan has assumed coverage on Tyson Foods (NYSE:TSN) with a Neutral rating and a $60.00 price target. According to InvestingPro data, the food products giant, with $54.15 billion in trailing twelve-month revenue, currently appears undervalued based on its Fair Value analysis.

The investment bank cited challenges in applying a mid-cycle multiple to Tyson’s potential future earnings, despite arguments for share price appreciation if segment-level earnings return to historic norms.

JPMorgan specifically noted that Tyson’s Beef segment, currently unprofitable, likely faces a prolonged recovery period extending to 2028 or beyond.

The firm also expressed concern that Chicken segment margins may be approaching peak levels, though it expects any decline to be moderate.

Additionally, JPMorgan indicated that Tyson’s Prepared Foods division might not escape various pressures affecting other packaged food businesses, including cost challenges, increased competition, and potential volume weakness. Despite these challenges, Tyson maintains strong liquidity with a current ratio of 1.73, and continues its 51-year streak of consistent dividend payments, currently yielding 3.53%.

In other recent news, Tyson Foods announced its fiscal third-quarter 2025 earnings, reporting better-than-expected earnings per share. The positive performance was primarily attributed to stronger-than-anticipated operating margins in its chicken segment. Despite this, Bernstein SocGen Group lowered its price target for Tyson Foods to $58 due to ongoing challenges in the cattle cycle and beef profitability, while maintaining a Market Perform rating. Piper Sandler also maintained a Neutral rating and a $58 price target for Tyson Foods following the earnings report. Additionally, Tyson Foods declared a quarterly dividend of $0.50 per share on Class A common stock and $0.45 per share on Class B common stock, payable on December 15, 2025. The company further expanded its share repurchase program by authorizing an additional 43 million shares. In corporate governance news, Tyson Foods appointed Sarah Bond, President of Xbox, as an independent director on its board. Meanwhile, Piper Sandler expressed optimism for non-alcoholic beverage companies like Coca-Cola (NYSE:KO) and Keurig Dr Pepper (NASDAQ:KDP), suggesting stronger performance compared to food and alcohol producers.

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