Tyson (TSN) Hits New 52-Week High; Do You Own It?

Shares of Tyson Foods Inc. (NYSE:TSN) hit a new 52-week high of $76.91 on Sep 2, recording a healthy year-to-date return of 24.43%. Shares of this meat processor have been rising since the company posted solid third-quarter fiscal 2016 results.

Investors were encouraged by the company’s raised outlook for fiscal 2016 and the ongoing optimism in the consumer staples sector.

Increased Guidance Fuels Optimism

Tyson raised its earnings guidance for the second time in the last six months. For fiscal 2016, Tyson projects annual earnings in the range of $4.40–$4.50 per share compared with $4.20–$4.30 per share expected earlier. The guidance is 40% over fiscal 2015 earnings. The raised guidance reflects robust consumer demand and declining livestock costs.

The company expects each segment to operate above its normalized range. Domestic chicken production is expected to go up, although fed cattle and hog supplies are expected to remain short even in fiscal 2017. However, the company expects the prepared foods segment to benefit from operational improvements and positive pricing.

Springdale, AR-based food processor, Tyson posted solid third-quarter fiscal 2016 wherein earnings surpassed the Zacks Consensus Estimate as well as the year-ago tally by 13.1% and 51%, respectively. Higher margins drove profits. Sales topped estimates and gained 6.6% year over year backed by higher volume.

Zacks Rank & Other Stocks to Consider

Tyson sports a Zacks Rank #1 (Strong Buy). Other players in the broader consumer staples sector worth considering include Sysco Corp. (NYSE:SYY) , Elizabeth Arden Inc. (NASDAQ:RDEN) and TreeHouse Foods Inc. (NYSE:THS) . All these stocks carry a Zacks Rank #2 (Buy).

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