What Happened?

Shares of meat company Tyson Foods (NYSE:TSN) jumped 10% in the morning session after the company reported strong third-quarter results that blew past analysts' gross margin and EBITDA expectations, while sales also exceeded expectations by a whisker.

In addition, its operating profit guidance for 2025 outperformed Wall Street's estimates. It appears the near-term top line outlook has some macro underpinnings with the company citing the United States Department of Agriculture (USDA) data which revealed domestic protein production (beef, pork, chicken, and turkey) should increase compared to fiscal 2024 levels. The modest demand forecast informed the company's expectations for sales to be down 1% to flat in fiscal 2025. However, the strong pricing contribution to growth is more than likely to continue, with full-year adjusted operating income expected to be roughly $2.0 billion at the midpoint, ahead of analysts' estimates.

Zooming out, we think this was a solid quarter, highlighting management's continued efforts to balance sales and profitability.

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What The Market Is Telling Us

Tyson Foods’s shares are not very volatile and have only had 1 move greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

Tyson Foods is up 14.7% since the beginning of the year, and at $63.68 per share, it is trading close to its 52-week high of $65.87 from September 2024. Investors who bought $1,000 worth of Tyson Foods’s shares 5 years ago would now be looking at an investment worth $716.47.

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