Stephens Inc. equity analyst Benjamin Bienvenu is optimistic about improved earnings for Tyson Foods and Pilgrim’s Pride in the upcoming quarters, citing enhanced operational fundamentals in a comprehensive commodity report.
Bienvenu has raised his earnings estimates for Tyson Foods for the fourth fiscal quarter ending September 30, 2023, to $0.30 per share from the previous $0.25. His projections for the full fiscal year 2023 also see an increase to $1.27 per share from $1.21. However, he slightly revised down his fiscal 2024 estimates to $2.97 per share from $3, citing challenges in the beef business.
“At Tyson, the chicken and pork businesses are expected to improve in 4Q23 and FY24, but challenges in beef create difficulty in forecasting total company results for FY24,” Bienvenu noted. He believes that even if beef margins face increased pressure in FY24, it may result from higher levels of heifer retention, signaling the start of a recovery in overall beef packer fundamentals.
As for Pilgrim’s Pride, Bienvenu increased his estimates for the fiscal third quarter ending in September to $0.41 per share from $0.35. For the full fiscal year ending December 31, he now projects earnings per share of $1.37, up from $1.19. Looking ahead to fiscal 2024, Stephens Inc. expects earnings per share to rise to $2.38 from $2.20.
“We are raising our estimates for the quarter and year for PPC as we think improving chicken fundamentals provide a stronger setup into 2024,” Bienvenu stated, expressing confidence in the positive trajectory for Pilgrim’s Pride.
