Is Tyson Foods stock a good buy in September 2021?

Tyson Foods, Inc. (NYSE: TSN) shares have advanced more than 9% since the beginning of August 2021; the company reported better than expected third-quarter results this month and announced a $300 million investment to build a new plant in Virginia. The company’s business has proven stability throughout the third fiscal quarter, and for the 2021 fiscal year,  Tyson Foods expects total revenue to be in the range of $46 billion to $47 billion.

Fundamental analysis: Tyson Foods began the fourth fiscal quarter in a strong position

This month, Tyson Foods reported better than expected third fiscal quarter results; total revenue has increased by 24.6% Y/Y to $12.48 billion, while the GAAP EPS was $2.05  (beats by $0.49). Total revenue has increased above expectations (+960 million), and Tyson Foods announced that it expects total revenue to be in the range of $46 billion to $47 billion for the 2021 fiscal year.

“We delivered strong operating earnings performance resulting in approximately $1.4 billion in operating income for the quarter. This represents an 81% increase compared to the prior year and translates to $2.70 in earnings per share. Our earnings reflect our three key priorities: one, to be the go-to supplier for customers and consumers; two, to be the most sought-after place to work; and three, to be operationally excellent, “said CEO Donnie King.

The company’s management reported that capital expenditures should be around $1.3 billion for fiscal 2021, while the net interest should be approximately $420 million. Tyson Foods declared a $0.40/quarterly share dividend in the second week of August 2021, which will be payable on December 15 to stockholders of record as of December 1, 2021.

Tyson Foods began the fourth fiscal quarter in a strong position; still, the Delta variant of the coronavirus continues to pose downside risks. Tyson will require COVID-19 vaccinations for the entire U.S. workforce by November 1 because this is the most effective thing company can do to protect its customers and employees.

Last week, the company announced that it plans to invest $300 million to build a new plant in Virginia to produce fully-cooked Tyson branded chicken products. The project is part of the company’s commitment to meet increasing demand, and it should create around four hundred jobs when production commences in the spring of 2023.

Fundamentally looking, Tyson Foods trades at less than six times TTM EBITDA, and with a market capitalization of $28.64 billion, shares of this company are fairly valued. Tyson Foods’ 2.2% dividend looks safe, and the company’s management remains very optimistic about the upcoming quarters in terms of growth which is certainly positive for shareholders.

Technical analysis: Tyson Foods shares have advanced more than 9% since the beginning of AugustData source: tradingview.com

Tyson Foods shares have advanced more than 9% since the beginning of August 2021, and if the price jumps above $80 resistance, we have the open way to $85 or even $90. On the other side, if the price falls below $70 support, it would be a sell signal, and the next target could be around $65.

Summary

Tyson Foods’ shares have advanced more than 9% since the beginning of August 2021, and with a market capitalization of $28.64 billion, shares of this company are fairly valued. Technically looking, Tyson shares could advance above the current price levels in September 2021, and if the price jumps above $80 resistance, we have the open way to $85 or even $90.

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