Tyson Foods (TSN) to Report Q1 Earnings: What Lies in Store?
Tyson Foods, Inc. TSN is slated to release first-quarter fiscal 2017 results on Feb 6, 2017. The question lingering in investors’ minds now is, whether this producer, distributor and marketer of chicken, beef, pork and prepared foods will be able to deliver a positive earnings surprise in the quarter to be reported.
Notably, in the trailing four quarters, the company has outperformed the Zacks Consensus Estimate by an average 8.5%. In first, second and third-quarter fiscal 2016, the company had registered a positive surprises of 32.2%, 11.5% and 13.1%, respectively. However, the company reported a negative surprise of 22.6% in the preceding quarter. Let’s see how things are shaping up for this announcement.
Factors Influencing this Quarter
Tyson’s business revolves around beef, pork and chicken as well as processed foods. The processed food business has been showcasing a decent performance so far. Moreover, the Hillshire Brands packaged foods buyout and a healthy liquidity impart strength to the stock.
Tyson Foods, Inc. Price and EPS Surprise
Tyson Foods, Inc. Price and EPS Surprise | Tyson Foods, Inc. Quote
The company has made a promising start to fiscal 2017, driven by the strong performance of its Core 9 categories and foodservice top-tier offerings, which continue to outperform the industry. In a recent investor conference, management stated that the chicken and prepared foods margins have returned to their normalized levels of 9–11%. This turnaround was driven by a 2% gain in chicken supply as predicted by the United States Department of Agriculture (USDA) as well as constant input cost. Additionally, the meat processor recently bought a 5% stake in a plant-based protein producer, Beyond Meat. Management has marked this takeover as its first step toward upping the ante for investment in meat substitutes.
However, Tyson has been witnessing soft results in the Beef, Chicken and Prepared Foods segment. Lower cattle supply and higher fed cattle costs have been responsible for the sluggishness in the segment. Shares have declined 11% over the last three months, underperforming the Zacks categorized Food-Meat Products industry which has declined 8% in the same time frame.
Zacks Model Shows Unlikely Earnings Beat
Our proven model does not conclusively show that Tyson Foods is likely to beat earnings estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Tyson Foods has an Earnings ESP of 0.00% as both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.30. Tyson Foods’ Zacks Rank #3 increases the predictive power of ESP. However, we need to have a positive ESP to be confident about an earnings surprise.
Stocks Poised to Beat Earnings Estimates
Here are some stocks that investors may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:
ConAgra Foods Inc. CAG has an Earnings ESP of +4.6% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Coty Inc. COTY has an Earnings ESP of +8.3% and a Zacks Rank #3.
Sanderson Farms Inc. SAFM has an Earnings ESP of +4.48% and a Zacks Rank #3.
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Tyson Foods, Inc. (TSN): Free Stock Analysis Report
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