In this file:
· Tyson to send more meat to supermarkets
· Did the Coronavirus Choke Too Much of Tyson's Upside?
· Chicken Run at Supermarkets Has Processors Boosting Output
Tyson to send more meat to supermarkets
About: Tyson Foods, Inc. (TSN)
By: Clark Schultz, Seeking Alpha
Mar. 17, 2020
· If you're worried about food products running out at grocery stores, there is good news from the supply chain.
· Tyson Foods is reacting to the widespread restaurant closings in the U.S. by making a major shift in its meat production toward the types of cuts sold more often in supermarkets.
· "This is the most significant shift we’ve ever initiated," the company tells Bloomberg...
Did the Coronavirus Choke Too Much of Tyson's Upside?
Jon C. Ogg, 14/7 Wall St.
March 17, 2020
Food is supposed to be a great defensive sector for investors. Unfortunately, when things come unglued they can get a little crazy. That has been the case for Tyson Foods, Inc. (NYSE: TSN) over the last month with its shares falling from above $80 down to under $45. Value investors and secular trend investors alike have been combing over the ashes that have been left by a stock market in flames. Tyson should be one of those companies. Unfortunately, that’s not what its trading performance has indicated during the coronavirus malaise.
According to the independent research firm Argus, it’s a good time to buy shares of Tyson after this much weakness. Before getting into the reason for why the sell-off has been too great, investors should at least consider that Argus previously had a Buy rating already and its old $92 target price is now down at $60 in the refreshed research report.
Even with the near-term impact of the coronavirus, the Argus report notes that Tyson is well positioned to benefit from the continuous growing demand for protein. The independent research firm also has a favorable view of Tyson’s internal efforts to boost sales of prepared foods with strong demand and with high margins in that portion of the food market.
Where the current problem area comes into play is the devastating impact that is happening with near-term revenue growth as the decline in the “away-from-home dining” is being mandated whether customers would prefer that to be the case or not.
Argus lowered its Fiscal Year 2020 earnings per share (EPS) estimate...
Chicken Run at Supermarkets Has Processors Boosting Output
Lydia Mulvany, Isis Almeida and Ed Ludlow, Bloomberg
via Yahoo Finance - March 17, 2020
(Bloomberg) -- Meat companies are ramping up processing to help restock coolers that are being emptied by Americans on edge because of the spreading coronavirus.
Tyson Foods Inc., the biggest U.S. meat processor, is making its “most-significant shift” ever to produce more chicken, beef and pork that’s favored by supermarket shoppers, rather than cuts that restaurants use. Employees are working through weekends to fill as many orders as possible.
Sanderson Farms Inc. said it is adding Saturday shifts at its five plants that process chicken for grocery-store customers, and is ready to convert two other plants to process more such birds. Pilgrim’s Pride Corp. and Perdue Farms Inc. are also working to accommodate the boom in retail demand.
As U.S. restaurants shutter amid efforts to stop the spread of the coronavirus, consumers are rushing to grocery stores to stock up on food and other staples. Fresh meat, along with dry and canned goods, toilet paper and hand sanitizer are among items that haven’t been restocked as quickly as they’ve been sold.
“Food stores in our tri-state area have been cleaned out of all poultry-related products due to the ability to freeze them,” said Brian Williams, senior vice president at Macquarie Group Ltd. in New York. “Product lines in the poultry space are being diverted to retail in lieu of restaurant capacity.”
The shift is important because 60% of Sanderson Farms’ business is focused on food service. On a call last week, Chief Executive Officer Joe Sanderson said the retail business is “extremely strong,” with the company “pretty well sold” at most of its plants.
Meat processors are also adding extra weekend shifts to get ahead of what might become a labor shortage at plants, said Russ Whitman, senior vice president at commodity researcher Urner Barry.
With the likelihood that school closures force some plant workers to stay at home, labor concerns are growing. The U.S. Department of Agriculture on Monday said plants will continue to operate staffed with federal inspectors...