Tyson Foods: Still Waiting on Cattle Supply to Beef Up Earnings; Stay Neutral

研报英文原文证据摘录

Tyson Foods: Still Waiting on Cattle Supply to Beef Up Earnings; Stay Neutral

nding for Chicken, margin pressures are starting

to emerge. The company’s comments today lead us to believe that at or below Style Exposure

the midpoint of its Chicken EBIT outlook for FY26 ($1.9-2.05 billion) is more

likely than the upper half. TSN (a) highlighted $490MM as the YTD average,

(b) discussed an expectation for relative balance across the year, (c) noted how

2Q26’s $523MM was abnormally strong, and (d) acknowledged Y-Y pressure

in 4Q from both lower commodity prices and weaker grain costs. The company

also sees continued tailwinds from its genetics business and also the sale of

value-added products (commodity sales only comprise roughly one-fourth of

the segment).

• For Beef, we see green shoots ahead, albeit from a historically depressed

starting point. TSN now expects Beef EBIT of -$650MM to -$500MM in

FY26, down from -$275MM in FY25 and -$157MM in FY24 (and profitability

in the preceding eight years). The main overhang on processing margins is the

declining cattle supply in the US. Per USDA data, cattle head slaughtered

declined 3.1% Y/Y in 2024, 6.4% Y/Y in 2025, and 7.9% Y/Y in the first six

months of 2026. This year’s decline is so great that it has more than offset the

potential benefits of TSN’s Nebraska beef plant closure (which accounted for

~5% of US slaughter capacity). Going forward, a 3-4% headwind from the US

restrictions on cattle imports from Mexico could soon start to reverse. JBS’s

upcoming plant closure in Pennsylvania could reduce industry capacity by

~2%. And by 2028, cattle slaughter could start to increase Y/Y (heifer retention

was +2.7% Y/Y at mid 2026).

• For Prepared Foods, a more favorable cost environment should help near-

term results.