Chicken or Egg? Does Tyson Have More Upside Than Cal-Maine Stock?

Core Insights - The stock performance of Tyson Foods and Cal-Maine Foods has diverged significantly, with Tyson experiencing a decline while Cal-Maine has seen substantial gains [2][14]. Tyson Foods - Tyson Foods, the largest beef and chicken producer in the U.S., reported a 1.6% year-over-year revenue increase to $13.35 billion in Q3 2024, surpassing consensus estimates of $13.21 billion [3][4]. - The beef segment generated $5.24 billion in revenue, up 1.4% year-over-year, while pork revenue grew by 12.6% year-over-year to $1.46 billion. Chicken revenue was $4.07 billion, down 3.7% year-over-year [4]. - Chicken remains the most profitable segment for Tyson, generating $244 million in GAAP profit, compared to losses in beef and pork [4]. - The USDA forecasts a slight increase in domestic protein production for 2023, with Tyson expecting a 2% decline in beef production and an adjusted operating loss of $300 million to $400 million for fiscal 2024 [5][6]. - Chicken consumption in the U.S. reached a record high of 101.1 pounds per person in 2023, projected to rise to 103.2 pounds in 2024 [6]. - Tyson's stock has a forward price-earnings ratio of 20.86, with a consensus price target of $59.00, indicating potential upside [7][14]. Cal-Maine Foods - Cal-Maine Foods, the largest egg producer in the U.S., reported a 71.1% year-over-year revenue increase to $785.9 million in its fiscal Q1 2025, exceeding consensus estimates [11]. - The company faced challenges due to avian influenza, leading to the depopulation of 3.1 million laying hens, which affected egg supply [10]. - Cal-Maine is expanding its cage-free egg production capacity with a $40 million investment to add five new layer houses, expected to increase capacity by 1 million cage-free hens by summer 2025 [12]. - Despite impressive stock gains, Cal-Maine's stock may be overvalued, trading at $90, with a consensus price target of $67.00, indicating a potential downside [13][14].