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Tyson is Teeming With Tasty Numbers - Time to Buy?

Argus’ John Staszak mentioned that Tyson Foods, Inc. TSN shares have shown a strong performance over the last quarter, appreciating 32 percent, as compared to the 11 percent increase in the S&P 500. The stock surged 71 percent over 2015.

Staszak initiated coverage of Tyson Foods with a Buy rating and price target of $80.

What Has Worked

“The company is benefiting from strategic acquisitions and divestitures, as well as from low commodity costs. Tyson has a share buyback program and has paid a dividend for 40 straight years,” the analyst said.

Staszak also pointed out that Tyson Foods has beaten expectations over the last three quarters and has been creating value for shareholders.

“Looking ahead, we expect strong benefits from Hillshire Brands and other potential acquisitions, as well as from continued stock buybacks and dividend increases,” Staszak stated.

1Q Beat

While the company is scheduled to report is 2Q results on May, its 1Q16 adjusted earnings beat the consensus expectations. The expectations for Tyson Foods has been rising over the past quarter, the analyst pointed out.

The company also reported record operating margins in 1Q for both its Prepared Foods and Chicken segments, which boosted earnings. The EPS also benefited from share buybacks.

Tyson Foods had raised its FY16 EPS guidance while announcing its 1Q earnings.

“In the press release, management raised its stock repurchase authorization by 50 million, to a total of nearly 60 million shares,” according to the Argus report.