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Tyson Foods Boosted on Bullish Analyst Note

J.P. Morgan raised its earnings-per-share estimate and rating for TSN

by 11/14/2011 10:30:43 AM
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Amid higher prices for chicken and pork, J.P. Morgan this morning upped its earnings-per-share estimates for three meat producers, including Tyson Foods, Inc. (TSN - 19.89). The brokerage also lifted its rating to "overweight" from "neutral."

According to Zacks, 76% of the analysts interested in the Arkansas-based company pegged the stock with a "buy" or better rating. However, Thomson Reuters places the average 12-month price target at $22.13, representing a relatively slim 13.4% premium to Friday's close of $19.51.

Despite depleting by 7% over the past month, short interest still accounts for a healthy 4% of TSN's float. These bearish bets would take four days to unwind, at the security's average pace of trading, which could translate into a contrarian boon for the stock.

Elsewhere, it appears that the options crowd has become pessimistic toward TSN. During the past two weeks, speculators on the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) have bought to open 1.09 puts for every call on the equity. This ratio arrives in the 82nd percentile of its annual range, signaling that traders on these exchanges have made bearish bets over bullish at a faster clip than usual over the past couple of weeks.

Plus, the equity's Schaeffer's put/call open interest ratio (SOIR) of 1.21 indicates that puts outnumber calls among options that are slated to expire within three months. This ratio ranks in the 81st percentile of its annual range, indicating that near-term option traders are more negatively aligned toward TSN than usual.

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