Is Tyson Foods (TSN) Stock Undervalued Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
Tyson Foods (TSN) is a stock many investors are watching right now. TSN is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 12.70, which compares to its industry's average of 15.98. TSN's Forward P/E has been as high as 13.09 and as low as 8.38, with a median of 10.12, all within the past year.
Investors will also notice that TSN has a PEG ratio of 1.45. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. TSN's PEG compares to its industry's average PEG of 2.13. Within the past year, TSN's PEG has been as high as 1.45 and as low as 0.76, with a median of 0.92.
We should also highlight that TSN has a P/B ratio of 2.17. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. TSN's current P/B looks attractive when compared to its industry's average P/B of 2.86. Over the past year, TSN's P/B has been as high as 2.22 and as low as 1.45, with a median of 1.78.
Finally, our model also underscores that TSN has a P/CF ratio of 9.64. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 13.70. Over the past year, TSN's P/CF has been as high as 9.87 and as low as 4.70, with a median of 6.72.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Tyson Foods is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, TSN feels like a great value stock at the moment.
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