Tyson Foods Stock Set to Rise on Earnings Beat

Options traders have been leaning bearish toward TSN

Managing Editor
Aug 6, 2018 at 9:23 AM
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Shares of Tyson Foods, Inc. (NYSE:TSN) are up 3.4% at $59.70 in electronic trading after the company early this morning reported fiscal third-quarter earnings that topped estimates, even as sales fell just short of expectations at $10.05 billion on falling pork and beef prices.

The food processing stock has been on a steep downtrend since hitting its early-December record peak of $84.65, most recently suffering a bear gap and hitting a fresh annual low in late July after lowering its full-year profit forecast following an increase in tariff pressures. TSN is down 28% year-to-date, and is now trading well below resistance at its 20-day moving average.

Looking toward options, traders have been leaning bearish of late. This is per data from the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which shows Tyson Foods stock with a 10-day put/call volume ratio of 1.62, ranking in the 77th annual percentile. This indicates that during the past two weeks, TSN puts have been purchased over calls at a faster-than-usual clip.

On the flip side, analyst sentiment is more optimistic toward the food name. Of the nine brokerage firms following TSN, six currently sport "strong buy" recommendations. Plus, the stock's average 12-month price-target of $73.20 stands at a nearly 27% premium to Friday's close.


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