Tyson Foods Inc.
) is set to report its third quarter of fiscal 2013 results on
Aug 5, 2013, before the opening bell. Last quarter, it posted a
21.7% negative surprise. Let's see how things are shaping up for
Why a Likely Positive Surprise?
Our proven model shows that Tyson is likely to beat earnings
because it has the right combination of two key ingredients.
Positive Zacks ESP:
Expected Surprise Prediction or ESP (Read:
Zacks Earnings ESP: A Better Method
), which represents the difference between the Most Accurate
estimate and the Zacks Consensus Estimate, is at 11.86%. This is
very meaningful and a leading indicator of a likely positive
earnings surprise for shares.
Zacks #2 Rank (Buy):
Tyson carries a Zacks Rank #2 (Buy). Note that stocks with Zacks
Ranks of #1, 2 or 3 have a significantly higher chance of beating
earnings. The Sell-rated stocks (#4 and 5) should never be
considered going into an earnings announcement.
The combination of Tyson's Zacks Rank #2 (Buy) and 11.86% ESP
makes us very confident about a positive earnings beat on Aug
What is Driving the Better-than-Expected
Tyson's continuous product innovations and strong momentum in
most of its business segments will help the company to post
modest gains in the third quarter..
There is a general shift of demand among health conscious
consumers from red meat toward low-calorie chicken and processed
chicken food items. This has helped the chicken meat business and
the processed food items gain popularity in the recent past
Tyson's endeavor to adapt to the changing demand of
low-calorie protein foods is encouraging. For fiscal 2013, it has
plans to enhance its lineups of hand-held, on-the-go food items
by adding some whole-grain items and bolder flavors. Moreover,
Tyson plans to add more gluten-free items in its gluten free line
of products keeping in view the increase in health consciousness
and a general shift among the consumers toward nutritious food
Corn prices have stabilized due to record harvest in 2013.
This is expected to impact Tyson's margin favorably by lowering
input cost as corn is used as feed for chicken by the
Other Stocks to Consider
Here are some other companies worth considering as our model
shows that they have the right combination of elements to post an
earnings beat this quarter:
KRAFT FOODS GRP (KRFT): Free Stock Analysis
PILGRIMS PRIDE (PPC): Free Stock Analysis
SANDERSON FARMS (SAFM): Free Stock Analysis
TYSON FOODS A (TSN): Free Stock Analysis
To read this article on Zacks.com click here.
Pilgrims Pride Corporation (
Earnings ESP of +3.57% and a Zacks Rank #2 (Buy)
Sanderson Farms Inc.
), Earnings ESP of +5.66% and a Zacks Rank #3 (Hold)
Kraft Foods Group Inc.
), Earnings ESP of +10.45% and a Zacks Rank #3 (Hold)