Chicken Pack Tyson Foods Inc. ready for photo in Tiskilwa, Illinois.
Daniel Acker | Bloomberg | Getty Images
Tyson’s food hit a 52-week low on Friday for the third day in a row, an indication investors are losing confidence in the corporate amid mounting pressure on margins and operational issues this 12 months.
The food processor’s stock fell greater than 4% this week to around $61 a share, its lowest level since November 2020. In 2022, the stock fell around 30%.
Piper Sandler, an investment firm, said late Wednesday it was becoming “more cautious” in regards to the firm because the firm’s margins have shrunk in recent months due to higher cattle farming costs and lower retail meat prices.
Deflation in beef and chicken prices in recent months, coupled with rising feed costs, have put more pressure on the livestock industry.
Staffing shortages and hatching problems make it hard for Tyson to sustain with orders. Wall Street Journal report in July. Tyson didn’t immediately respond to a request for comment.
Piper Sandler projected a three-year average profit decline of three.9% from 2023 to 2025. The corporate maintains a “hold” rating on the stock with a price goal of $68 per share.
Tyson’s collapse extends declines for stocks within the second half of the 12 months.
The corporate had a powerful first quarter, with sales up greater than 23% to nearly $13 billion, beating its own expectations and nearly doubling its profits.
Nevertheless, Piper Sandler downgraded Tyson’s stock in May, warning budget-conscious consumers that they might look to cheaper meat brands as inflation pushed up prices.
Although the costs of meat, poultry, fish and eggs fell month-on-month in November, according to the Consumer Price Inflation Report, these categories are still up almost 7% from last 12 months.
Barclays and Argus Research also downgraded Tyson this 12 months, citing similar concerns. According to research by FactSet, a minimum of seven major Wall Street firms have either hold or sell rankings.
— CNBC Michael Bloom contributed to this report.