Key points
- Although best known for chicken, Tyson Foods is the largest beef producer in the United States, with more than $5 billion in quarterly sales for the first fiscal quarter of 2024.
- Tyson Foods sells its beef and pork under brands including Chairman’s Reserve Meats, Star Ranch Angus Beef, ibp Trusted Excellence Brand, Reuben Corned Beef and Open Prairie Natural Pork.
- Pilgrim’s Pride is one of the world’s largest chicken producers, reporting a strong fourth quarter of 2023, beating EPS estimates by 16 cents, with revenue climbing 9% year-over-year to $4.5 billion.
- 5 stocks we like best in Hormel Foods
At $1,300 a month, with limited supply and side effects including nausea, vomiting and gastrointestinal illness, there are many reasons to find more affordable and palatable ways to lose weight other than turning to the medical industry and resorting to GLP-1 weight-loss drugs like Ozempic and Wegovy from Novo Nordisk A/S NYSE: NVO. And these underlying reasons are bringing the carnivore diet back into the spotlight for people looking for alternatives to GLP-1.
The diet of carnivores is composed exclusively of meats, fats and proteins of animal origin. The ketogenic diet may be more appealing to those who need fiber and variety. Both diets are low-carb alternatives, which also benefit people with type 2 diabetes. The only requirement is meat, and lots of it. Here are two stocks that feed carnivores and benefit from the Ozempic craze.
Tyson Foods
Although it is primarily known for chicken and poultry products, Tyson Foods Inc. New York Stock Exchange: TSN it is the largest beef producer in the United States. Tyson’s beef and pork are sold under brands including Chairman’s Reserve Meats, Star Ranch Angus Beef, ibp Trusted Excellence Brand, Reuben Corned Beef and Open Prairie Natural Pork. It recently opened its $42 million state-of-the-art facility in Columbia, South Carolina, for its Tyson Fresh Meats division. Popular meat brands include Jimmy Dean, Ball Park, Hillshire Farm and Aidells.
Solid fiscal result in the first quarter of 2024
On February 5, 2024, Tyson reported EPS of 69 cents, beating analysts’ estimates by 28 cents. GAAP operating profit fell 51% year-over-year to $231 million. Adjusted operating profit fell 9% year over year to $411 million. Total adjusted operating margin was 3.1%. Revenue increased 0.4% year over year to $13.32 billion versus analysts’ estimates of $13.34 billion. Total liquidity was $3.7 billion as of December 30, 2023. Check the heat map of the sector on MarketBeat.
Sales by segment
Chicken sales totaled approximately $4.03 billion. Prices fell 3.9% year-over-year and volume fell 1.5% year-over-year. Beef sales totaled $5.02 billion. Prices increased 10.5% while volume fell 4.1% year over year. The beef industry remains “fundamentally challenging” as limited livestock supplies have led to a squeeze on spread. Nearly 50% of the loss in the quarter was related to inventory valuation adjustments. Sales were driven by a higher price per pound offset by lower productivity. Pork sales were $1.5 billion, driven by lower prices, down 8.5%, offset by volume growth up 7.7% year-over-year. Spreads are improving in pork.
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Tyson expects full-year fiscal 2024 revenue to be relatively stable, coming in at $52.81 billion for full-year 2023 versus the $53.08 billion analysts estimated.
CEO Insights
Tyson CEO Donnie King acknowledged that inflation is declining, but consumers still face higher prices than they did 2 years ago. However, they are still willing to buy brands they know and trust.
King commented, “The value proposition of our iconic brands resonates strongly with consumers. Over the past year, nearly three in four U.S. households purchased a product from Tyson’s core business line, and this penetration rate is growing What excites me even more is that our product line with the highest penetration rate is only present in about a third of households, which leaves us plenty of room for continued growth over the long term.”
Tyson Food analyst ratings and price targets I’m on MarketBeat. Shares of Tyson Food peers and competitors can be found with MarketBeat Stock Screener.
Daily ascending triangle
The daily candlestick chart on TSN illustrates an ascending triangle pattern that triggered a breakout on the earnings gap at $60.65 on February 5, 2024. However, it formed a gap and bust as the stock sold off the highs for the next four days falling below the ascending lower trend line. Shares bottomed near 200-period daily moving average (MA) support, triggering a breakout to $52.17. The daily relative strength index has moved back down through the 50 band. Pullback support levels are at $52.17, $49.52, $46.35, and $44.25.
Pilgrim’s pride
Pilgrim’s Pride Co. NASDAQ:PPC is one of the largest chicken producers in the world. They trade under various brands, including Pilgrim’s Chicken, Just Bare, Gold’n Plump, Moy Park and Pilgrim’s UK. Pilgrim’s Fresco, Pilgrim’s Value Added, Del Dia, Country Pride Chicken, O’Kane, Pierce Chicken, To-Rico’s, Savoro and Gold Kist. Poultry sales were strong, particularly in the prepared foods sector, which saw Just Bare and Pilgrim’s sales grow 59% year-on-year. Obtain AI-powered insights on MarketBeat.
Knocks it out of the park
Pilgrim’s Pride reported fourth-quarter 2023 earnings per share of 59 cents, beating consensus analysts’ expectations of 16 cents. GAAP operating margin was 3%. GAAP net income was $321.6 million, while adjusted net income was $400.3 million. Revenue grew 9% year over year to $4.5 billion, beating consensus estimates of $4.48 billion.
CEO Insights
Fabio Sandri, CEO of Pilgrim’s Pride, noted that 2023 was a challenging year, but that they were able to drive growth under the most challenging circumstances. The affordability and availability of chicken have found favor with its customers. The company worked closely with key retail and foodservice clients to increase traffic through promotions.
The company has completed construction of its hatchery and feed mill in Merida, with production expected to begin in March 2024. Sandri commented: “Going forward, we will expand the distribution of our existing innovations through retail and further diversify our portfolio in the food service industry will be critical to driving continued growth. Our investments in people over the past few years have resulted in net adequate staffing and reduced turnover levels across all of our U.S. facilities.”
Pilgrim’s Pride analyst ratings and price targets I’m on MarketBeat.
Daily bull flag breakout
The daily candlestick chart on PPC illustrates a bullish flag breakout pattern. The flagpole formed during the rally from $22.23 on October 3, 2023, to a high of $29.02 on January 8, 2024. After peaking, PPC stock retreated into a channel descending parallel to form the flag. The bull flag breakout occurred during the breakout of $27.31 on February 12, 2024, pushing the stock higher into the fourth quarter 2023 earnings release. The strong performance caused the stock to gap up to $31.24 dollars and a peak at $32.63 in the following days. The pullback support levels are at $30.00, $28.49, $27.52, and $26.52.
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