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Why Tyson (TSN) Stock Is So Mid: A Crispy Breakdown of a Lukewarm Giant
Tyson Foods (NYSE: TSN) is one of the biggest names in meat. Chicken? Check. Beef? Yep. Bacon? You bet. But when it comes to the stock, investors should have only one word to describe it: mid.
Let’s chew on why Tyson, despite its protein-packed empire, continues to underwhelm on Wall Street.
The Setup: What Tyson Should Be
Tyson is the second-largest meat processor in the world. It owns brands like Hillshire Farm, Jimmy Dean, and Ball Park—staples of freezers and tailgates everywhere. It should be a defensive, inflation-resistant juggernaut. Meat never goes out of style, right?
Well… not so fast.
1. Margins That Make You Say “Meh”
Tyson’s operating margin in FY2024 was just 1.3%. You read that right—one point three. That’s not a margin; that’s a rounding error.
Compare that to:
- Hormel (HRL): ~9%
- Costco’s rotisserie chicken department: Emotionally priceless
- Your grandma’s side hustle selling deviled eggs: Probably higher margins
Tyson’s commodity-heavy cost structure means margins get chewed up every time corn, soybean, or cattle prices twitch.
2. CapEx Buffet with No Dessert
Tyson’s annual capital expenditures hover near $2 billion—and that’s not to fund AI, robots, or a metaverse chicken farm. It’s just to keep the slaughterhouses running and frozen sausage links rolling.
Meanwhile, free cash flow has been inconsistent, even negative in recent years. In FY2023, FCF was –$1.2 billion. That’s a chicken-load of red ink.
3. Volume Is Flat, Pricing Power Is Flatter
You’d think America’s largest chicken supplier could flex its pricing muscle. But the reality? Consumers are trading down to cheaper proteins or plant-based alternatives (blasphemy, we know). Retail buyers like Walmart and McDonald’s also squeeze Tyson’s pricing–due to their inordinate negotiating power as large distributors of Tyson’s product.
4. The Chicken Cycle Is Brutal
Agribusiness is cyclical, but Tyson takes it to another level.
- One quarter, chicken prices skyrocket—egg hatcheries rejoice.
- Next quarter, oversupply tanks prices and profits.
- Then there’s a random avian flu outbreak, just for fun.
Even their beef business is at the mercy of cattle inventory cycles and droughts. Tyson is basically the macroeconomic equivalent of a weather-dependent food truck.
5. Management = Solid but Not Sizzling
Let’s be clear: Tyson’s management isn’t terrible. But they’re not reinventing the wheel either. Strategic moves like closing underperforming plants and investing in automation are smart—but not game-changing.
Meanwhile, other food companies are pivoting to higher-margin snacks, branded goods, and global expansions. Tyson is… still making a lot of meat.
6. The Stock Chart Tells the Tale
- TSN is down ~40% from its 2022 peak
- It’s underperformed the S&P 500 and even sleepy peers like Hormel
- The dividend yield (currently ~3.6%) is nice… until inflation eats it alive
And with no sexy growth story, Wall Street just shrugs.
So, Is Tyson Bad?
No. Tyson is not a (hot)dog. It’s just… mid. The definition of “fine.” It’ll likely stick around forever, feeding the masses with efficiency and grit. But it doesn’t excite. It doesn’t scale fast. And it doesn’t generate the kind of free cash flow or innovation that make investors perk up and say: “Now this is a compounder.”
Final Bite: Tyson Is for Meat, Not Momentum
If you want a steady dividend, a meat moat, and a company that’s too big to fail (but too slow to fly), Tyson’s fine.
But if you’re hungry for growth, fat margins, or a stock that does more than just sit in the fridge of your portfolio—Tyson is as mid as a gas station hot dog at 3am.
DISCLAIMER: This analysis of the aforementioned stock security is in no way to be construed, understood, or seen as formal, professional, or any other form of investment advice. We are simply expressing our opinions regarding a publicly traded entity.
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