Tyson Foods Stock Rises After Besting Analysts' Estimates

Expenses are expected to drop by 39% in the coming year

Deputy Editor
Nov 16, 2020 at 3:41 PM
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The shares of meat industry giant Tyson Foods Inc (NYSE:TSN) are up 3.5% at $64.52 at last check. Today's positive price action comes after the food concern reported a fiscal fourth-quarter earnings beat -- brushing off lower-than-expected revenue. Furthermore, the company said it expects expenses that were driven up by the pandemic to drop by 39% in 2021, in part because certain items won't need to be replaced, such as the infrared temperature scanners in its plants.

On the charts, TSN has been consolidating between the $55 and $65 level since March. The descending 200-day moving average -- which was conquered on Friday for the first time since February -- also swooped in to catch today's pullback, and appears to be emerging as a potential area of support. Year-to-date, Tyson Foods stock is down 29.3%. 

TSN Nov 16

The options pits are chiming in at full force after today's update, with 11,000 calls and 4,094 puts across the tape so far -- more than double the average intraday amount. The November 65.50 call and the December 62.50 put are the two most popular, with new positions being opened at both. 

Despite calls outnumbering puts on an absolute basis, Tyson Foods stock's 50-day put/call volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) stands higher than all but 1% of readings in its annual range. In other words, puts are being picked up at a faster-than-usual rate.

Now looks like a good time to weigh in on TSN's next move with options. The equity's Schaeffer's Volatility Index (SVI) of 32% stands higher than just 9% of all other readings in its annual range, implying options players are pricing in relatively low volatility expectations at the moment. 

 

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