Meatpacker Tyson Foods (NYSE:TSN) will permanently close its pork plant in Perry, Iowa. The move will eliminate about 1,200 jobs. The move is part of the company’s efforts to enhance operational efficiency and reaccelerate growth.
The company is witnessing challenges across its Chicken, Beef, and Pork business segments. Lower commodity prices are adversely hurting Tyson Foods’ Chicken business. Meanwhile, tight supply in the Beef segment raises cattle costs. Also, the export market remains tough. In the Pork segment, challenges related to internal live production and supply, increased feed costs, and margin compression remained a drag.
In response to these challenges, Tyson Foods closed six of its chicken and two of its smaller beef case-ready value-added facilities over the past year. The company’s CEO, Donnie King, said during the Q1 Fiscal 2024 conference call that TSN is seeing the positive outcome of these actions. It’s worth noting that the company’s adjusted EPS nearly doubled in Q1 on a quarter-over-quarter basis, led by its initiatives to improve operational performance.
Is TSN a Buy or Sell?
Despite these difficulties, TSN stock inched up 1.1% in one year. Further, analysts’ average price target suggests continued pressure on TSN stock over the next 12 months.
It has one Buy, six Hold, and one Sell recommendations for a Hold consensus rating. Analysts’ average price target on TSN stock is $55, implying 1.31% downside potential from current levels.
