Is Tyson Foods (TSN) Pricing Reflecting Conflicting DCF And P/E Signals?

• If you are wondering whether Tyson Foods at around US$63.86 is giving you fair value for the risk you take, you are not alone.
• The stock has been relatively steady over the last week with a 0.1% decline, while returns stand at 3.6% over 30 days, 10.0% year to date and 9.4% over 1 year, with a 15.8% return over 3 years and 9.1% over 5 years, providing extra context for longer term holders.
• Recent coverage has focused on Tyson Foods as a key player in branded and commodity protein products, along with ongoing interest in how it manages costs, pricing and consumer demand across its portfolio. These themes help frame how investors are thinking about risk and potential reward at the current share price.
• Our valuation checks give Tyson Foods a 2 out of 6 valuation score. Next, we will walk through what different valuation approaches say about that number, and finish by looking at a more complete way to think about the stock's value beyond any single score.

Tyson Foods scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Tyson Foods Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a company might be worth by projecting its future cash flows and discounting them back to today, so you can compare that value with the current share price.

For Tyson Foods, the model uses a 2 Stage Free Cash Flow to Equity approach built on cash flow projections. The latest twelve month free cash flow is about US$797.3 million. Analyst inputs extend out to the 2027 financial year, with Simply Wall St extrapolating the ten year path after that. By 2035, the model uses a projected free cash flow of about US$2.35b, all stated in US$ and then discounted back to today.

Based on these projections and assumptions, the DCF output suggests an estimated intrinsic value of about US$137.79 per share. Relative to the recent share price of about US$63.86, this DCF indicates that the stock could be trading at a discount of around 53.7% to the model’s estimated value.

Result: UNDERVALUED (per this DCF model)

Our Discounted Cash Flow (DCF) analysis suggests Tyson Foods is undervalued by 53.7%. Track this in your watchlist or portfolio, or discover 54 more high quality undervalued stocks.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Tyson Foods.

Approach 2: Tyson Foods Price vs Earnings

For a profitable company like Tyson Foods, the P/E ratio is a common way to think about value, because it links what you pay per share to the earnings the business is currently generating.

In general, higher growth expectations and lower perceived risk can justify a higher P/E ratio. Slower growth and higher risk usually point to a lower, more conservative P/E range. There is no single “right” number, but comparisons can give you useful context.

Tyson Foods is trading on a P/E of about 112.4x. That sits well above the Food industry average of 24.6x and above the broader peer average of 17.6x. Simply Wall St also provides a proprietary “Fair Ratio” for Tyson Foods of 36.8x, which reflects factors like its earnings profile, industry, profit margin, market cap and specific risks.

This Fair Ratio is often more informative than simply lining the stock up against peers or the sector, because it adjusts for company specific characteristics rather than assuming all firms in an industry deserve similar multiples.

Comparing Tyson Foods actual P/E of 112.4x with the Fair Ratio of 36.8x suggests the shares are trading well above what this framework would point to.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Tyson Foods Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce Narratives. On Simply Wall St’s Community page these allow you to set out your own story for Tyson Foods by linking your assumptions on future revenue, earnings and margins to a fair value. You can then compare that fair value with the current price, so you can see how a more cautious view anchored around a US$55 fair value or a more optimistic view closer to US$78.24 leads to very different conclusions. Each Narrative updates automatically as new news or earnings arrive, giving you a clear, easy to use bridge between the company’s story and the numbers.

For Tyson Foods, however, we will make it really easy for you with previews of two leading Tyson Foods Narratives:

Each one connects a different view of future earnings and margins to a specific fair value, so you can decide which version of the story feels closer to your own expectations.

🐂 Tyson Foods Bull Case

Fair value in this bull leaning narrative: US$69.08 per share

Implied discount to this fair value at US$63.86: about 8.2%

Assumed revenue growth rate: 1.93% a year

• Analysts in this camp expect Tyson Foods to benefit from steady global protein demand, stronger Prepared Foods and value added products, and ongoing efficiency gains that support higher margins over time.
• The narrative assumes margins move higher as operational discipline, cost savings, and brand investment support more stable earnings across beef, chicken, pork, and prepared foods.
• To agree with this view, you would need to be comfortable with revenue reaching about US$57.7b, earnings of US$2.3b, and a future P/E of around 12x by 2028, using a discount rate close to 6.8%.

🐻 Tyson Foods Bear Case

Fair value in this bear leaning narrative: US$60.00 per share

Implied premium to this fair value at US$63.86: about 6.4%

Assumed revenue growth rate: 1.42% a year

• The bearish view focuses on slower revenue growth, rising regulatory and input costs, and earnings volatility from issues like cattle supply, disease risks, plant closures, and labor challenges.
• It also flags the risk that changing consumer preferences toward plant based and alternative proteins, along with slower progress in those categories, could weigh on Tyson Foods core meat segments over time.
• To agree with this stance, you would need to see revenues closer to US$56.5b, earnings of about US$2.2b, and a future P/E of roughly 11x by 2028, again using a discount rate near 6.8%.

These Narratives show how the same company can look either slightly cheap or slightly expensive depending on your view of protein demand, beef margin recovery, cost pressures, and what feels like a reasonable future P/E. Once you are clear on which story lines up with your own expectations, you can decide whether Tyson Foods at around US$63.86 fits the risk and return profile you are comfortable with.

Curious how numbers become stories that shape markets? Explore Community Narratives

Do you think there's more to the story for Tyson Foods? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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