Tyson Foods (TSN) Stock Ready for an Upside Breakout

We have a price target of $64 on Tyson (TSN) shares.
By Bruce Kamich ,

NEW YORK (TheStreet) -- Tyson Foods (TSN) - Get Report made an upside breakout from a recent consolidation. Higher prices are expected.

TSN rocketed higher the past few sessions, breaking out to a new 52-week high, chart above. The slope of the 50-day average is rising, as is the 200-day. The On-Balance-Volume (OBV) line also made a new high, confirming the price strength.

The longer-term chart of TSN is bullish and the breakout can be seen clearly.

The point and figure chart of TSN, above, also shows the upside breakout and a price target of $64. A pullback to $46 would make us uncomfortable.

TheStreet Ratings team rates TYSON FOODS INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

We rate TYSON FOODS INC (TSN) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, impressive record of earnings per share growth, attractive valuation levels and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • TSN's revenue growth has slightly outpaced the industry average of 1.2%. Since the same quarter one year prior, revenues slightly increased by 4.0%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • TYSON FOODS INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, TYSON FOODS INC increased its bottom line by earning $2.95 versus $2.40 in the prior year. This year, the market expects an improvement in earnings ($3.56 versus $2.95).
  • Net operating cash flow has increased to $898.00 million or 41.41% when compared to the same quarter last year. In addition, TYSON FOODS INC has also vastly surpassed the industry average cash flow growth rate of -23.10%.
  • You can view the full analysis from the report here: TSN

Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.

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