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Tyson Foods Upgraded to “Buy” at KeyBanc (TSN)

Poultry producer Tyson Foods, Inc. ( TSN ) on Friday caught a big upgrade from analysts at KeyBanc, who cited higher expected margins.

The firm said it boosted its rating on TSN from "Hold" to "Buy" with a $23 price target. That target implies a 24% upside to the stock's Thursday closing price of $18.56.

A KeyBanc analyst commented, "After meeting with Donnie King, Senior Group VP, Poultry and Prepared Foods, last week at an industry conference and analyzing all the strategic and operational changes management has made to it chicken business, we now have more confidence in the Company's ability to deliver normalized chicken margins of at least 5% (compared to our previous estimate of 4% and the Company's guidance range of 5-7%). Furthermore, based on our channel checks with chicken lenders and other industry insiders, we now believe that chicken production cuts in 2H11 are more likely and should prove to be catalysts for the stock…We are increasing our normalized EPS estimate to $2.12 (from $1.70) before owing mainly to an increase in our normalized chicken margin assumption."

Tyson Foods shares rose 16 cents, or +0.9%, in premarket trading Friday.

The Bottom Line

Shares of Tyson Foods ( TSN ) have a .86% dividend yield, based on last night's closing stock price of $18.56. The stock has technical support in the $16-$18 price area. If the shares can firm up, we see overhead resistance around the $20 price level.

Tyson Foods, Inc. ( TSN ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.2 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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