Although Tyson Foods (TSN - Get Report) delivered an earnings beat for its first quarter and raised guidance, its stock tumbled earlier this week, due in part to its disclosure that the SEC had subpoenaed the company likely about recurring accusations of chicken price fixing.

Tyson reported earnings per share of $1.59 on revenue of $9.18 billion, ahead of consensus estimates of $1.26 and $9.05, respectively, and raised its guidance. But in its Monday 10-Q filing, the company provided an unwelcome update on the long-running accusations.

"On January 20, 2017, the Company received a subpoena from the Securities and Exchange Commission in connection with an investigation related to the Company," the filing stated. "We are cooperating with the investigation, which is at an early stage. Based upon the limited information we have, we believe the investigation is based upon the allegations in In re Broiler Chicken Antitrust Litigation."

In re Broiler Chicken Antitrust Litigation is a class-action lawsuit alleging that Tyson fixed prices by manipulating an industry benchmark.

Until December, chicken prices were influenced by the Georgia Dock pricing index provided by Georgia's Department of Agriculture. Major poultry companies, including Tyson and competitors Pilgrim's Pride (PPC - Get Report) and Sanderson Farms (SAFM - Get Report) , submitted information to the Georgia Dock, and the survey results were used to set the prices. The companies have denied these allegations.

In November, the agency tweaked its rules for the index, requiring poultry companies to provide evidence of the veracity of the information they submitted. The changes proved unpopular: the Georgia Dock was "suspended indefinitely" on Dec. 21 due to "a lack of contributions," with a new index, the Georgia Premium Poultry Price Index, unveiled Jan. 6.

The lawsuit was filed Sept. 2 in the United States District Court for the Northern District of Illinois. Maplevale Farms, a food distributor in western New York State, alleged that Tyson and its subsidiaries attempted to fix chicken prices by manipulating the Georgia Dock, the industry benchmark chicken pricing index. Tyson has filed motions to dismiss Maplevale's suit. Shareholders subsequently filed a class-action suit in the United States District Court for the Western District of Arkansas.

"We continue to believe that chicken price-fixing allegations are unfounded," Jefferies analyst Akshay Jagdale wrote, adding that the news of the SEC investigation could hurt Tyson shares in the short term. Still, he added, Tyson's "value-added earnings stream remains significantly undervalued" at a roughly "31% discount to large-cap branded packaged food peers."

Similar, Credit Suisse analyst Robert Moskow noted that the SEC investigation was one of a "confluence" of issues, including heightened competition in the protein market, which "makes it difficult to rebuild confidence in the bull case that the stock deserves a valuation multiple closer to consumer staples peers."

Tyson has a "solid" balance sheet and generates free cash flow of over $1 billion after dividends annually, which gives it some of the best "M&A optionality...in the food space," Jagdale wrote, adding that he believes Tyson could complete another transformative acquisition similar to its $8.55 billion purchase of Hillshire Brands in 2014.

Shares of Tyson are slightly higher at $64.87 in early morning trading.