TYSON FOODS, INC. (TSN): what the price requires
The current priced-in claim for TYSON FOODS, INC. (TSN) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/TSN
Headline
| Field | Value |
|---|---|
| Ticker | TSN |
| Company | TYSON FOODS, INC. |
| Sector / Industry | Consumer Defensive / Food & Beverage |
| Current price | $57.93/sh |
| Composition | Beef 40% / Pork 11% / Chicken 31% / Prepared Foods 18% / International/Other 4% / Intersegment -4% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (mid-cycle) | 4.0% |
| Trailing margin (depressed year) | 2.0% |
| Multiple paid | 13x mid-cycle operating income |
The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.
Solve inputs: computed at a 6.8% cost of capital with 4% terminal growth over a 5-year stage.
Reconcile: at the x-ray's 9.3% required return this reads ~3.2%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.08σ |
| cohort percentile (of 69 peers) | 26 |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; asset-based land below the price.
How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 5.79x | 5 | expensive |
| Earnings | 1.46x | 4 | expensive |
| Relative | 1.04x | 5 | expensive |
| Growth | 1.00x | 5 | justifies |
Families that justify the price: Relative, Growth Families that call it expensive: Asset
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.
Per-Model Detail (n=19)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $65.83 | 0.88x | yes | FCF base $1.2B, growth 4% (input: historical growth), terminal g 3.9%, WACC 9.2%, 5yr projection |
| DCF Exit Multiple | Growth | $57.69 | 1.00x | yes | Exit EV/EBITDA: 9.0x / 11.0x / 13.0x (bear / base = today's held flat / bull), 5yr |
| Relative Valuation | Relative | $55.85 | 1.04x | yes | P/E 28.98x (blended: static sector reference 22x + trailing (TTM) 45x), scenarios: 24.4x / 29.0x / 33.5x (bear / base = reference held flat / bull), EV/EBITDA 14x |
| Simple DDM | Growth | $30.21 | 1.92x | yes | DPS $1.99, g=2.5% (sustainable: ROE (TTM) × retention; not the terminal-growth assumption), ke=9.3% |
| Two-Stage DDM | Growth | $70.53 | 0.82x | yes | Stage 1: 20% for 5yr, Stage 2: 3.5% perpetual |
| Simple Excess Return | Asset | $13.83 | 4.19x | yes | BV/sh $51.12, ROE (TTM) 2.5%, ke 9.3% |
| Two-Stage Excess Return | Asset | $8.00 | 7.24x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $42.69 | 1.36x | yes | Rev $55.7B, growth 4% (input: historical growth; tapered), Terminal P/S: 0.3x / 0.4x / 0.4x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $15.24 | 3.80x | yes | EPS $1.27, growth 2% (input: historical EPS growth), PEG=22.64 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $50.72 | 1.14x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $2.20B × (1−26%) / WACC 9.2% → EPV (no growth) |
| Residual Income | Asset | $5.88 | 9.85x | yes | BV $51.12 + 5yr PV of (ROE (TTM) 2.5% − Kₑ 9.3%) × BV; BV grows 1.6%/yr |
| Graham Number | Asset | $38.22 | 1.52x | yes | √(22.5 × EPS $1.27 × BVPS $51.12) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $73.15 | 0.79x | yes | EBITDA $1.82B × sector EV/EBITDA 14.0x |
| FCF Yield | Earnings | $38.49 | 1.51x | yes | FCF $1227.0M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | — | — | no | — |
| Ben Graham Formula | Earnings | $40.98 | 1.41x | yes | EPS $1.27 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $10.01 | 5.79x | yes | BV $51.12 × (ROIC 1.8% / WACC 9.2%) |
| P/Sales Sector | Relative | $314.75 | 0.18x | yes | Revenue $55.71B × sector P/S 2.0x |
| PEG Fair Value | Relative | $47.63 | 1.22x | yes | EPS $1.27 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $13.73 | 4.22x | yes | EPS $1.27 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $7.9b |
| Net debt / NOPAT (after-tax) | 4.87x |
| Net debt / operating income (pre-tax) | 3.58x |
| Interest coverage | 5.2x |
| Share count CAGR (buyback) | -0.7% |
| Burning cash | no |
Leverage and coverage are computed on normalized mid-cycle operating income (mid-cycle margin 4.0%); the trailing year was depressed.
Bullet Takeaways
- Tyson runs four protein segments, and the FY2025 10-K names them plainly, "We operate in four reportable segments: Beef, Pork, Chicken, and Prepared Foods" (accession 0000100493-25-000095); the segments are on opposite cycle phases right now, with chicken and prepared foods carrying earnings while beef posts losses.
- The defining risk is the cattle cycle: U.S. cattle supplies hit a 75-year low in 2026, Tyson's beef segment lost $202 million in the March quarter, and management says herd rebuilding is 'spotty' with full relief not likely until around 2028.
- The balance sheet is a genuine strength, near-zero net debt and 270 percent free-cash-flow conversion, and the stock trades at 0.37 times sales; watch the FY2026 guidance of $2.2 to $2.4 billion in adjusted operating income and whether chicken keeps offsetting beef.
Bull Case
The balance sheet is where the bull case starts, because it is what lets Tyson wait out the worst beef market in a generation without flinching. Debt-to-equity sits at 0.01, essentially net-debt-free, the bankruptcy-risk read is deep in the safe zone, and free cash flow converted at 270 percent of net income over the trailing year, meaning cash generation ran far ahead of depressed reported earnings. That is the profile of a company whose accounting earnings are being masked by a cyclical trough in one division while the cash keeps coming. Tyson used it to keep the dividend at $1.99 a share, buy back stock (the share count is falling), and hold leverage near zero, all while beef bled. When the cycle turns, that same balance sheet becomes optionality rather than defense.
The operating story right now is chicken and prepared foods carrying the company, and both are structurally better businesses than the commodity beef line. Chicken delivered $523 million of adjusted operating income at a 12.2 percent margin in the March quarter, and prepared foods, the branded segment the 10-K describes as including "brands such as Jimmy Dean, Hillshire Farm, Ball Park, Wright, State Fair, as well as artisanal brands Aidells and Gallo Salame" (accession 0000100493-25-000095), grew operating income 7 percent to $352 million at a 14 percent margin. Prepared foods is the part of Tyson that behaves like a consumer staple rather than a commodity processor, packaged brands with pricing power and stable demand, and its 14 percent segment margin is respectable against branded-food peers. Chicken benefits from vertical integration and lower feed-grain costs, and the company guides the segment to $1.9 to $2.05 billion of operating income for the full year.
The valuation is where the contrarian case sharpens. At $57.81, Tyson trades at 0.37 times sales and about 11 times EBITDA against a food-sector median near 14, on earnings that are cyclically depressed by beef. Normalize to mid-cycle economics and the price sits below what even a 5 percent annual decline in operating profit would warrant; management guides full-year adjusted operating income to $2.2 to $2.4 billion, well above the trailing GAAP figure. The company is buying a business at a trough multiple on trough earnings, with the earnings drag concentrated in a single segment whose cycle is, by the nature of cattle biology, self-correcting. Herd rebuilding is expected to begin in earnest and deliver full benefit around 2028, and a buyer today is being paid to wait for it in a name that generates cash and returns capital while the wait continues.
Bear Case
The moat here is thinner than the brand names suggest, because most of Tyson is a commodity processor whose margins are set by the spread between input animals and output meat, not by anything defensible. That spread has collapsed in beef, and the collapse is structural, not a bad quarter. Cattle supplies fell to a 75-year low in 2026, pushing live prices to records, and Tyson's beef segment, its single largest by revenue at $5.21 billion in the quarter, lost $202 million on it. The prior-year filings show this is a deepening trend, not a blip: the beef segment posted an $816 million operating loss over the first nine months of fiscal 2025, including $343 million of goodwill impairment charges (accession 0000100493-25-000076), Tyson writing down the value of its own beef business. When a processor cannot buy cattle cheaply enough to make money slaughtering them, no amount of operational skill fixes it; the constraint is upstream, in herds that take years to rebuild.
And rebuilding is not happening on schedule. Tyson's own CFO called ranchers' herd-expansion efforts "spotty" and regional, warning supplies stay tight through 2026 and into 2027 with full relief around 2028. That pushes the beef recovery a bull might be underwriting two years out, and the policy backdrop could make it worse: proposals to lower beef prices by boosting imports would, per the Farm Bureau, discourage the very domestic herd rebuilding Tyson needs. Meanwhile the 10-K is explicit that the whole enterprise runs on volatile commodity inputs, warning it is "exposed to fluctuating market conditions" and holds grain and livestock futures positions to manage it (accession 0000100493-25-000095), hedges that reduce but never remove the exposure.
The reported earnings quality flatters the picture in a way the bear should flag. The March quarter's headline growth, net income up 3,614 percent year over year, is arithmetic off a near-zero prior-year base, not operating power; net margin was still just 1.9 percent. On trailing GAAP earnings the stock trades at 45 times, and the case for it being cheap rests entirely on believing normalized mid-cycle margins return, which in turn rests on the cattle cycle turning on management's timeline. If beef stays in loss longer than 2028, if chicken margins mean-revert from a cyclically strong 12 percent as feed costs or bird supply normalize, or if prepared foods cannot raise price against value-seeking grocery shoppers, the mid-cycle normalization the price leans on simply does not arrive, and a 0.37 times sales multiple turns out to be fair rather than cheap. The bull is buying a cycle turn; the bear notes the cycle keeps refusing to turn.
Valuation
The trailing earnings mislead here, so the price has to be read against normalized economics rather than the trough. On through-the-cycle margins applied to current revenue, the market is paying about 13 times mid-cycle operating income at $57.81 (July 2026), a multiple low enough that the price sits below what even a 5 percent annual decline in operating profit would warrant. That is the key framing: Tyson is being valued as if its earning power will erode, and the buyer is compensated for a base case worse than flat. Against the company's own history, the near-term pace embedded in the price is within what it has delivered; the stretch, such as it is, is duration, not rate, and the multiple sits in the lower half of its peer range.
The method families sort along the commodity-versus-brand fault line. Relative multiples and the forward-growth methods land right around the price, while asset-based methods read it as expensive, unsurprising for a capital-heavy processor whose plants carry real book value but earn commodity returns. No single fair value is the point; the spread says the market is paying roughly a normal-processor multiple, neither a bargain-basement distressed price nor a growth premium. One measurement note matters for coherence: two trailing operating-income bases appear in the inputs, a normalized $2.2 billion and an EDGAR trailing figure near $1.2 billion, about 91 percent apart, precisely because the trailing number is trough-depressed by beef while the normalized one reflects mid-cycle. The reader should not divide one into the price and expect the other's multiple.
The balance sheet is what makes the trough survivable and belongs in the valuation close. Leverage is moderate and well covered, debt-to-equity is 0.01, and free cash flow ran at 270 percent of net income, so the company funds its $701 million dividend and its buyback from cash even in a down year for beef. The concrete bet at this price is not a margin the company has never earned; it is the return of margins it earns routinely once cattle supply normalizes, guided by management to $2.2 to $2.4 billion of full-year adjusted operating income. What would break the thesis is not a soft quarter but evidence that the beef cycle has structurally lengthened, herd rebuilding stalling past 2028, because then the normalized earnings the price discounts back never fully materialize and today's low multiple is simply correct.
Catalysts
Tyson's second fiscal-quarter report, covering the period ended March 28, 2026, was the recent catalyst and it beat on the strength of chicken: adjusted EPS of $0.87 against a $0.78 estimate on revenue of $13.65 billion, up 4.4 percent year over year. The segment split was the story, chicken at $523 million of adjusted operating income (12.2 percent margin) and prepared foods up 7 percent to $352 million (14 percent margin), against a $202 million adjusted operating loss in beef on tight cattle supply. Management raised the full-year frame to $2.2 to $2.4 billion of adjusted operating income on 2 to 4 percent sales growth, with chicken guided to $1.9 to $2.05 billion, prepared foods to $1.25 to $1.35 billion, and beef expected to remain in loss.
The cattle cycle is the dominant forward variable and it is running against the recovery timeline. Cattle supplies sit at a 75-year low, and CFO Curt Calaway described herd-rebuilding efforts as 'spotty' and regional, with tightness persisting through 2026 into 2027 and full benefit not expected until around 2028. Each quarterly print between now and then is effectively a read on two things: whether beef losses are stabilizing and whether chicken margins hold at their current cyclically strong level. A policy wildcard sits on top, potential federal action to lower beef prices by easing import tariffs, which could add near-term supply but, per the Farm Bureau, discourage the domestic herd rebuild the recovery depends on.
The capital-return cadence is the steady counterweight to the cyclical noise: a $1.99 annual dividend, ongoing buybacks that are shrinking the share count, and near-zero net leverage that gives management room to keep returning cash through the trough. The items to watch into the back half of fiscal 2026 are beef loss trajectory against the guided full-year loss, chicken operating income against the $1.9 to $2.05 billion range, and any management commentary that moves the 2028 herd-recovery expectation earlier or later.
Peer Cohorts (Per Segment, With Filing Citations)
Beef (reported)
- SFD (SMITHFIELD FOODS, INC.)
- (no filing in the citation store)
- HRL (HORMEL FOODS CORPORATION)
- (no filing in the citation store)
- PPC (PILGRIM’S PRIDE CORPORATION)
- (no filing in the citation store)
- BG (BUNGE GLOBAL SA)
- (no filing in the citation store)
- ADM (ARCHER-DANIELS-MIDLAND CO)
- (no filing in the citation store)
Pork (reported)
- SFD (SMITHFIELD FOODS, INC.)
- (no filing in the citation store)
- HRL (HORMEL FOODS CORPORATION)
- (no filing in the citation store)
- PPC (PILGRIM’S PRIDE CORPORATION)
- (no filing in the citation store)
- BG (BUNGE GLOBAL SA)
- (no filing in the citation store)
Chicken (reported)
- PPC (PILGRIM’S PRIDE CORPORATION)
- (no filing in the citation store)
- HRL (HORMEL FOODS CORPORATION)
- (no filing in the citation store)
- SFD (SMITHFIELD FOODS, INC.)
- (no filing in the citation store)
- BG (BUNGE GLOBAL SA)
- (no filing in the citation store)
Prepared Foods (reported)
- HRL (HORMEL FOODS CORPORATION)
- (no filing in the citation store)
- SFD (SMITHFIELD FOODS, INC.)
- (no filing in the citation store)
- CAG (CONAGRA BRANDS, INC.)
- (no filing in the citation store)
- GIS (GENERAL MILLS INC)
- (no filing in the citation store)
- SJM (THE J. M. SMUCKER COMPANY)
- (no filing in the citation store)
- MKC (McCORMICK & COMPANY, INCORPORATED)
- (no filing in the citation store)
- PPC (PILGRIM’S PRIDE CORPORATION)
- (no filing in the citation store)
Methodology Note
- Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
- Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
- Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
- Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.
Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.
Sources
Q2 FY2026 results; Reuters · Q2 FY2026 results · The Beef Site · Reuters; The Poultry Site · Q2 FY2026 results via Investing.com · Reuters; The Beef Site