TSN
Tyson Foods, Inc.
$52.98
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 14.6% above fair value
You pay
$52.98
Bear
$36.98
Fair
$46.22
Bull
$55.46
Bear
$36.98
-30.2%
$4.62 × 8x P/E
Fair
$46.22
-12.8%
$4.62 × 10x P/E
Bull
$55.46
+4.7%
$4.62 × 12x P/E
Adjust Assumptions
10.0x
4.62$
Key Value Driver
Normalized P/E multiple (10x base case)
Implied Market Multiple
11.5x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (30 analysts)
$67.40
Divergence from AlphaVal
31%
Summary
Applying a 10x P/E to adjusted EPS of $4.62, the base-case value is $46.22 per share. DDM cross-check: $35.21.
Warnings
The company's reported profits differ from official accounting profits by 240%. Check what costs are being left out of the adjusted number.
The company pays out 150% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $35.21 (below our primary estimate by 24%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $67.40 (from 30 analysts). Our estimate is 31% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples