Food company Tyson Foods, Inc. (NYSE:TSN)’s shares are down by 11.9% year-to-date. Beef is the reason for most of the firm’s woes as the US continues to deal with a historic disruption for the food product. Cramer has liked the firm but has been wary of the beef prices for more than a year. For instance, in May 2025, he remarked that:
“I’ve always felt that Tyson should be much, much higher, but it doesn’t have the earnings power for me to be able to say that. I think you gotta, I think why you gotta put this one on hold, I don’t see it presenting ourselves any great opportunities at this very moment.”
Even after more than a year, his opinion hasn’t changed as the CNBC TV host commented on September 18th:
“That the worst is over? No, no, there sometimes it’s darkness and it’s dark. I mean like have you ever been to Iceland? It’s kind of Iceland. . . You know, it’s really dark. That’s Tyson. Nice people.”
Tyson Foods, Inc.’s woes were clear in its third quarter earnings released in early August. Its revenue remained flat while beef sales fell by 3.9% annually. Given the fact that 38.9% of Tyson’s revenue came from beef, to make it the largest segment, the business’s woes affect the entire business. No wonder Cramer called the firm “really dark.”
The woes are so bad that on September 3rd, the firm announced that it was reducing annual operating income and revenue growth forecasts. Tyson reduced operating income guidance to $1.85 billion to $2.05 billion from an earlier 2.1 billion to $2.3 billion. Similarly, revenue growth guidance was cut to 1.5% to 2.0% from an earlier 2.5% to 3.5%. The woes have forced Tyson to cut down its operations, as the firm closed a major beef plant in Nebraska while announcing plans to either shut down or sell three more beef packaging sites and plants.
On the positive side, all other non-beef segments grew in Q3. Tyson’s chicken, prepared foods, pork and International businesses grew by 0.83%, 1.70%, 4.90% and 7.80%, respectively. Consequently, the firm could generate long term headwinds if it maintains growth in these businesses to transform itself into a protein provider. Additionally, management also revealed that 75% of the chicken business’s income was now tied to committed customer contracts which injects stability and visibility into the firm’s revenue.
So, how do these factors contrast with hedge fund sentiment? Well, according to Insider Monkey’s data, 45 funds had held a stake in the firm in Q2 compared to 33 in Q1. The shares trade at a forward P/E ratio 11.22 which is rather modest and lower than Hormel’s 12.85. Short interest as a percentage of float is 3.14% lower than Hormel’s 7%.
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