Goldman Sachs’ Stocks With Highest Consensus Returns: 42 Stocks With The Highest Consensus ROE

11. Tyson Foods, Inc. (NYSE:TSN)

Consensus ROE: 25%

Number of Hedge Fund Investors in Q2 2024: 27

Tyson Foods, Inc. (NYSE:TSN) is one of the biggest food companies in the world. The firm primarily sells meat products, ranging from nuggets to patties, hot dogs, bacon, and steaks. As Tyson Foods, Inc. (NYSE:TSN) sells all kinds of meat, specifically fish, chicken, beef, and pork, its business is somewhat diversified despite a pure play focus on meat based foods. This is important since if one kind of meat faces industry or market troubles, the firm can try to make up through sales of other meats. In fact, 2024 has seen beef prices soar with the monthly average for all fresh beef retail value sitting at $8.15 per pound in July 2024 for more than a two decade high. This has come on the back of dropping cattle inventory as farmers sought to keep more cattle for slaughter instead of reserving them for breeding. On the flip side, chicken prices have fallen on the back of improved supply. Subsequently, Tyson Foods, Inc. (NYSE:TSN) is stressed with low margins on both sides, as high cattle prices drive up costs while low chicken prices constrain its ability to maintain margins with low volume. However, the firm is taking an active approach and has improved its chicken hatch ability and mortality by 3.6% and 0.5%, respectively.

Tyson Foods, Inc. (NYSE:TSN)’s management commented on its proactive actions during the Q2 2024 earnings call:

“As I mentioned, chicken had one of its best quarters in some time, but we are clearly benefiting from better market conditions including lower grain costs, our actions and focus on the fundamentals across all aspects of the value chain are also contributing to these strong results. Our live operations continue to improve with hatch rate and livability up year-over-year.

We generate efficiencies and improve utilization in our plants by optimizing our network. Our demand planning and customer service have also taken significant steps forward as we improve order bill rates and continued to build long-term partnerships with customers all the while reducing inventory. We’ve reinvested some of the proceeds from these improvements into the long-term growth of our value added chicken business. For instance, we’ve accelerated the ramp up of our Danville Fully Cooked facility and launched new products like honey bites and restaurant quality wings. In summary, our focus on the basics has built a fundamentally stronger chicken business with an eye on the future.”