Should I buy Tyson Foods shares after the company’s management set aggressive targets?
Tyson Foods, Inc. (NYSE: TSN) shares are advancing after the company’s management set aggressive targets at an investor event this week.
Tyson set aggressive targets
Tyson Foods is an American multinational corporation that is the world’s second-largest processor and marketer of chicken, beef, and pork after JBS.
The company’s business has proven resilient throughout the 2021 fiscal year, and the company reported better than expected fourth-quarter results in November.
Total revenue has increased by 20.4% Y/Y to $12.81 billion, while the GAAP EPS for the last fiscal quarter of 2021 was $3.71 (beats by $1.51). CEO Donnie King said:
We have a tremendous opportunity ahead as we work to fulfill the growing global demand for safe and nutritious protein products. We’re entering fiscal 2022 with great momentum and are committed to delivering strong returns for shareholders into the future.
The company’s management set aggressive targets at an investor event this week and reported that Tyson Foods would target a high single-digit compound annual growth rate in adjusted EPS in the mid-term working off of 2019 as the comparable.
Tyson’s financial goals in the mid-term include growing volume faster than annual protein consumption, sustaining operating cash flows of around $4 billion, and seeing a 12% return on invested capital.
Capital expenditures should be between $4 and $6 billion for the period of the next three years, while the company plans to open 12 new plants by the 2024 year.
These projects are part of the company’s commitment to meet increasing demand, and it is also important to mention that Tyson announced this month a $50 million bonus plan for plant workers.
This is proof that the company’s management takes care of employees, and under the bonus plan, nearly 80,000 workers will get $300 to $700 above the wage increases.
Tyson Foods has spent over $500 million on wage raises and bonuses in the 2021 fiscal year, while the average value of wages and benefits paid out to its hourly workers has increased from $22 to $24.
Tyson Foods trades at less than six times TTM EBITDA, the company is expanding its market share, and with a market capitalization of $30.4 billion, shares of this company are not expensive.
Bulls control the price
Tyson Foods shares have advanced more than 6% since the beginning of December 2021, and if the price jumps above $86, we have the open way to $90 resistance.
On the other side, if the price falls below $80 support, it would be a sell signal, and the next target could be around $78.
Tyson Foods reported better than expected fourth-quarter results in November, and the company’s management set aggressive targets at an investor event this week. Tyson Foods shares have advanced more than 6% since the beginning of December 2021, and for now, bulls remain in control of the price action.
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