High Poultry Praise

Things are going pretty well for Tyson Foods Inc., and they are only going to get better, according to Timothy Ramey of Pivotal Research Group in New York City.

The firm recently initiated its coverage of Tyson, issuing a note to investors on Dec. 9 that gave the company a buy rating and a price target of $55.

That’s not too shabby, considering — as noted in Ramey’s assessment — margins are already at historically high levels, input costs are low and will inevitably rise, and the fact that Tyson accumulated a lot of debt during its $8.55 billion acquisition of Hillshire Brands Co. 

The acquisition, however, will also be a source of growth for the company, Ramey said. But he gives the lion’s share of the credit for his predicted impending stock price rise to the company’s effective operations and the never-been-stronger leadership.

Ramey ranks CEO Donnie Smith among the top five CEOs he has ever known. And that’s high praise, coming from a 30-year veteran of covering the food industry.

Ramey also noted that consumers are shifting from carbohydrate-based to protein-based meals, a trend that will come out in Tyson’s favor, as it produces about 20 percent of all protein meals serviced in the U.S.
Tyson is the number one producer of chicken, with a 21-percent market share; number one in beef, with a 24-percent market share; and number two in pork, with a 17-percent market share.