Tyson Stock Brushes Off Plant Closures

The meat producer said consumers will definitely feel the impact of these closures

Deputy Editor
Apr 23, 2020 at 10:39 AM
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Meat production suffered another blow today, as Tyson Foods, Inc. (NYSE:TSN) announced the closure of two of its major U.S. pork plants in order to contain the spread of the coronavirus. This includes a subsidiary in Indiana, while over 2,000 of its employees undergo testing. This has led to other locations picking up the slack. However, Tyson Fresh Meats Group President Steve Stouffer said "consumers will see an impact at the grocery store." Still, TSN is up 0.2% last seen trading at $60.

Tyson stock is poised for a fifth-straight close above its 40-day moving average -- a trendline that has acted as a ceiling on the charts for most of the year. The last time the equity consistently closed north of this trendline was in mid-January, when the stock was trading near record highs. Year-to-date, TSN is suffering a 34.2% deficit.

Despite this, there is plenty of optimism surrounding Tyson. Of the seven analysts in coverage, all but one rate it a “strong buy.” Echoing this is the stock’s consensus 12-month price target of $84.27, which sits at a 40.6% premium to current levels.

In the options pits, TSN sports a 10-day put/call volume ratio of 1.44 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which sits in the elevated 91st percentile of its annual range. This suggests that the appetite for long puts is much healthier than usual, as of late.

 

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