Value
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.7 |
| P/S | 10.0 |
| EV/EBITDA | 5.7 |
| Fwd P/E | 8.7 |
| PEG | 6.8 |
| Analyst target | 5.0 |
- ▸Forward P/E: 12.9x
- ▸PEG: 1.04
TSN · Why this verdict
Why Tyson Foods (TSN) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.1/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Tyson Foods has delivered a perfect 4-for-4 earnings beat streak with an average 17.2% positive surprise and exceptional 227% free cash flow conversion, but momentum is deeply negative with RSI at 28 near capitulation territory and a confirmed downtrend — a value-oriented setup contingent on an operational recovery from depressed levels.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Free cash flow at 227% of net income — classified as excellent cash conversion — indicates that Tyson generates substantially more cash than it reports in GAAP earnings, reflecting the capital efficiency of its integrated protein processing model and supporting its ability to fund dividends, debt reduction, and investment through the cycle. Quality breakdown | Free cash flow conversion remains above 150% of net income over the next four quarters, sustaining the premium cash generation characteristic that provides financial flexibility relative to peer protein processors. | →Stable |
| CounterVery high FCF-to-net-income ratios in food processors can reflect accelerated accounts receivable collection or inventory liquidation that is not sustainable; the ratio may compress to more normal levels as working capital normalizes. | ||
Tyson Foods has beaten analyst EPS estimates in every quarter of the last year — 4 for 4 — with an average positive surprise of 17.2%, including a 37.8% beat in Q3 2025 and an 11.6% beat in the most recent quarter, demonstrating that actual protein processing performance has materially exceeded conservative analyst models. Earnings | Earnings beat rate remains at 100% for the next 2 consecutive quarters with average surprise staying above 8%, confirming that the operational recovery in beef, chicken, and pork processing has been genuine and sustained. | ↓Deteriorating |
| CounterLarge beat percentages suggest analyst models were set too conservatively after the prior year's difficulties; as models recalibrate to the actual recovery level, future beats will compress and the EPS surprise driver of re-rating will diminish. | ||
RSI at 28 is in capitulation territory below the 30 threshold, with the stock also in a confirmed downtrend below the 200-day moving average — a combination that historically represents oversold conditions in large-cap consumer staples companies that often precede mean reversion. Momentum breakdown | RSI recovers above 40 within 3 months and the stock regains the 200-day moving average, indicating the oversold condition has resolved and the technical trough is forming. | ↓Deteriorating |
| CounterCapitulation-level RSI readings in stocks with deteriorating fundamentals do not automatically reverse; if the near-term earnings recovery stalls or commodity input cost pressures return, the oversold condition can persist for extended periods without triggering a meaningful recovery. | ||
With 24% analyst upside to a consensus target and a forward P/E of 12.6x with a PEG of 1.04, Tyson trades at a valuation consistent with its earnings growth rate, making this a potential recovery value setup in a consumer defensive protein company with durable demand characteristics. Sentiment breakdown | Analyst consensus price target rises at least 8% above the current $57.30 price within 12 months as the earnings beat streak drives upward estimate revisions and the discount to fair value narrows. | ↓Deteriorating |
| CounterA PEG of 1.04 implies approximately fair value at current prices rather than a discount; if protein commodity cycles turn adverse or labor and grain input costs increase, the forward earnings estimates embedded in the current valuation could prove too optimistic. | ||
Free cash flow at 227% of net income — classified as excellent cash conversion — indicates that Tyson generates substantially more cash than it reports in GAAP earnings, reflecting the capital efficiency of its integrated protein processing model and supporting its ability to fund dividends, debt reduction, and investment through the cycle.
→StableQuality breakdown
- Expectation
- Free cash flow conversion remains above 150% of net income over the next four quarters, sustaining the premium cash generation characteristic that provides financial flexibility relative to peer protein processors.
CounterVery high FCF-to-net-income ratios in food processors can reflect accelerated accounts receivable collection or inventory liquidation that is not sustainable; the ratio may compress to more normal levels as working capital normalizes.
Tyson Foods has beaten analyst EPS estimates in every quarter of the last year — 4 for 4 — with an average positive surprise of 17.2%, including a 37.8% beat in Q3 2025 and an 11.6% beat in the most recent quarter, demonstrating that actual protein processing performance has materially exceeded conservative analyst models.
↓DeterioratingEarnings
- Expectation
- Earnings beat rate remains at 100% for the next 2 consecutive quarters with average surprise staying above 8%, confirming that the operational recovery in beef, chicken, and pork processing has been genuine and sustained.
CounterLarge beat percentages suggest analyst models were set too conservatively after the prior year's difficulties; as models recalibrate to the actual recovery level, future beats will compress and the EPS surprise driver of re-rating will diminish.
RSI at 28 is in capitulation territory below the 30 threshold, with the stock also in a confirmed downtrend below the 200-day moving average — a combination that historically represents oversold conditions in large-cap consumer staples companies that often precede mean reversion.
↓DeterioratingMomentum breakdown
- Expectation
- RSI recovers above 40 within 3 months and the stock regains the 200-day moving average, indicating the oversold condition has resolved and the technical trough is forming.
CounterCapitulation-level RSI readings in stocks with deteriorating fundamentals do not automatically reverse; if the near-term earnings recovery stalls or commodity input cost pressures return, the oversold condition can persist for extended periods without triggering a meaningful recovery.
With 24% analyst upside to a consensus target and a forward P/E of 12.6x with a PEG of 1.04, Tyson trades at a valuation consistent with its earnings growth rate, making this a potential recovery value setup in a consumer defensive protein company with durable demand characteristics.
↓DeterioratingSentiment breakdown
- Expectation
- Analyst consensus price target rises at least 8% above the current $57.30 price within 12 months as the earnings beat streak drives upward estimate revisions and the discount to fair value narrows.
CounterA PEG of 1.04 implies approximately fair value at current prices rather than a discount; if protein commodity cycles turn adverse or labor and grain input costs increase, the forward earnings estimates embedded in the current valuation could prove too optimistic.
Per-dimension breakdown
Quality
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.9 |
| ROA | 1.6 |
| Gross margin | 0.0 |
| Op margin | 1.5 |
| Net margin | 0.4 |
| Current ratio | 6.5 |
| FCF quality | 10.0 |
| Moat | 4.5 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 227% FCF/NI
- ▸No competitive moat
- ▸Strong Piotroski F-Score: 8/9
Growth
3.6/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 3.6 |
Momentum
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 8.8 |
| OBV | 1.0 |
| MA position | 2.2 |
| Volume | 2.7 |
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA but MA still rising (+0.9%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
5.1/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 3.0 |
| Analyst rating | 5.0 |
| Price target | 7.6 |
- ▸LLM news sentiment: -0.40 (n=1)
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 2.5 |
| quality rank | 1.3 |
| growth rank | 3.8 |
Technical
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 5.0 |
| support resistance | 4.3 |
| 52w position | 6.8 |
| gap | 5.0 |
Risk (lower is worse)
8.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.2 |
| days to cover | 8.3 |
| volatility | 7.2 |
| beta | 10.0 |
| debt equity | 8.2 |
Catalyst
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 5.2 |
| news activity | 5.0 |
- ▸Perfect beat streak: 4Q
- ▸Earnings in 14 days
- ▸Dividend: 3.5%
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (3)
- INSIDER:OK
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.8<4.5
- ASYMMETRY:0.7<1.5@spot
Warning (2)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
- EARNINGS_PROXIMITY:14d<=14d (soft)
Reward-to-Risk
0.70
Upside
+3.8%
Downside
5.4%
Sizing output
AVOID
SetupRange Bound — RSI 43 mid-range, Bollinger mid-band
EdgeCatalyst-Driven — Earnings in 14d with 4/4 beat streak
SuitabilityModerate — Balanced profile
Investment implication
The SELL_IF_HOLDING verdict reflects the MOMENTUM gate's 3.8<4.5 outcome against Risk (lower is worse) at 8.4 and asymmetric R:R of 0.70.
The strongest dimensions are Risk (lower is worse) at 8.4, Insider at 7.3, and Catalyst at 6.7; the weakest are Peer rank at 3.3, Growth at 3.6, and Momentum at 3.8. The V9 engine flagged 2 failed gates with 2 warnings, producing an asymmetric reward-to-risk of 0.70 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Beat Streak High Surprise
Trip ifEPS surprise falls below 0% in at least 2 of the next 4 quarters, breaking the perfect beat streak and indicating the protein processing recovery is reversing.
- P2Exceptional Free Cash Flow Conversion
Trip ifFree cash flow as a percentage of net income falls below 80% for 2 or more consecutive quarters, indicating the exceptional cash conversion is normalizing downward significantly from current levels.
- P3Rsi Capitulation Potential Trough
Trip ifRSI falls below 20 and the stock price drops below $53.00, more than 7% below current levels, indicating capitulation is deepening rather than forming a recoverable trough.
- P4Analyst Upside Value Case
Trip ifAnalyst consensus price target falls below $52.00 — more than 9% below the current price — indicating models are marking down intrinsic value toward and below market pricing.