Tyson Foods (TSN) faces bullish prospects for chicken and prepared foods, while the beef segment is poised for more losses in fiscal 2025, UBS Securities said Friday in a report.
UBS initiated coverage of Tyson with a neutral rating and a price target of 62.
Consumer demand for chicken and prepared foods is expected to increase, and falling poultry feedstock prices may bolster margins, UBS said.
The beef segment faces a loss of $300 million in fiscal 2025 after an operating loss of $291 million in the previous year, UBS said. "Beef macro
remains challenging," and international growth would be supportive, the report said.
Tyson has reduced costs by closing several chicken processing plants, shutting corporate offices and cutting staff, boosting prospects for margins, UBS said.
The company may return $4.64 billion to shareholders from 2024 to 2029 through dividends and stock buybacks, or 22% of its current market value, UBS said.
UB forecast fiscal 2025 earnings before interest, taxes, depreciation and amortization forecast of $3.315 billion, trailing Wall Street's estimates of $3.332 billion.
Tyson is set to announce fiscal Q1 results on Feb. 3.
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