Tyson Foods is entering a critical turning point, with JPMorgan arguing that several forces now emerging across the beef and poultry markets could help the meat giant recover from one of its most difficult stretches.
JPMorgan upgraded Tyson Foods to Overweight from Neutral on September 18 and set a $63 price target, although that target was reduced from its previous $65 level. The change comes as Tyson’s shares remain close to their 52-week low following months of pressure from historically tight U.S. cattle supplies and deteriorating beef margins.
But the upgrade does not mean Tyson’s problems have disappeared.
Instead, JPMorgan’s thesis centers on the possibility that some of the forces that hurt Tyson’s beef business could gradually begin moving in the opposite direction.
Beef Could Be the Biggest Piece of the Recovery Story
According to JPMorgan analyst Thomas Palmer, Tyson’s beef earnings could improve from historically depressed levels as several factors begin to line up.
Among them are Tyson’s decision to shrink and reorganize its beef-processing network, the gradual reopening of U.S. cattle trade with Mexico and the prospect of greater domestic cattle availability.
The bank also noted that Tyson’s shares were trading at roughly a one-times discount to historical averages on an enterprise-value-to-EBITDA basis, another factor behind the rating change.
That thesis is particularly significant because beef has become Tyson’s biggest financial headache.
In early September, Tyson warned that its beef operation would generate an adjusted operating loss of between $625 million and $775 million for fiscal 2026. The company also lowered its total adjusted operating-income outlook to $1.85 billion to $2.05 billion, from its previous $2.1 billion-to-$2.3 billion range.
Tyson attributed the deterioration primarily to volatile cattle prices, severe cattle shortages and pressure on the value of cattle inventories.
Reuters reported that the company had already cut its profit outlook twice in roughly a month as the cattle crisis intensified.
Tyson Is Shrinking Its Beef Footprint to Survive the Cattle Shortage
One of the biggest changes underway is Tyson’s restructuring of its beef network.
In August, the company announced that it would concentrate its beef operations around three strategically located facilities:
- Dakota City, Nebraska
- Holcomb, Kansas
- Amarillo, Texas
Tyson said it would end operations at its Joslin, Illinois, beef facility and Eagle Mountain, Utah, case-ready facility while pursuing the sale of its Pasco, Washington, beef facility.
The company plans to transfer capacity to facilities with room to operate more efficiently and eventually increase production as cattle become available.
That restructuring could become important if cattle supplies improve.
Instead of maintaining a larger network during a period when cattle are scarce, Tyson is attempting to concentrate production in facilities it considers strategically better positioned for the long term.
JPMorgan sees that reduced footprint as one of the factors that could support beef earnings when industry conditions normalize.
Mexico Could Become Another Piece of the Puzzle
Cattle imports from Mexico are another potentially important variable.
The United States has been gradually reopening southern ports to Mexican livestock after restrictions related to the New World screwworm outbreak disrupted cross-border cattle trade.
USDA reopened the Douglas, Arizona, port to cattle imports in August under enhanced safeguards and has been preparing additional southern ports for reopening.
But the process remains complicated.
Reuters reported on September 17 that USDA had confirmed a new New World screwworm case in a horse in New Mexico shortly before a planned reopening of the Santa Teresa port. That underscores the continuing biosecurity risk surrounding the cattle trade.
For Tyson, however, a sustained reopening of the Mexican cattle pipeline could eventually increase the availability of livestock entering the U.S. market.
That does not mean an immediate turnaround.
Cattle imported for feeding require time before they are ready for slaughter, meaning any improvement in Tyson’s beef economics would likely depend on how quickly additional supply works through the production system.
Chicken Is Already Giving Tyson a Cushion
While beef remains under severe pressure, Tyson’s chicken business has been providing an important counterweight.
The company’s third-quarter results showed seven consecutive quarters of chicken growth, while adjusted operating income for the overall company increased 8% year over year to $547 million.
Tyson reported third-quarter sales of $13.87 billion and adjusted earnings per share of $0.99.
Earlier in the year, Reuters also reported that higher beef prices were encouraging some consumers to shift toward chicken as a more affordable protein option.
That creates an unusual dynamic for Tyson: the company’s most troubled protein category is beef, while chicken can benefit from consumers looking for cheaper alternatives.
JPMorgan does see a complication, however.
The bank expects rising feed costs to create pressure in chicken, although it believes some of that pressure could be offset by production cuts across the industry.
Prepared Foods Could Get Another Boost
Another part of the Tyson story is its Prepared Foods business, which includes branded products and ready-to-eat or ready-to-prepare offerings.
Tyson said in its September outlook update that Prepared Foods continued to perform well, supported by its brands, pricing discipline and product innovation.
The company has also been emphasizing brands such as Tyson, Hillshire Farm, Jimmy Dean, Aidells, Ball Park and State Fair as part of a broader strategy to strengthen branded food sales.
At a September Barclays conference, incoming CEO Jeff Schomburger said the company was looking to apply greater operational discipline to its innovation pipeline, brand plans and customer relationships.
That matters because Tyson isn’t relying solely on a recovery in commodity meat markets.
The company is simultaneously trying to increase the contribution from higher-value branded and prepared products.
The Timing Could Coincide With a CEO Change
Tyson is also approaching a leadership transition.
Jeff Schomburger is scheduled to become president and CEO on October 4, 2026, succeeding Donnie King. Schomburger previously spent 35 years at Procter & Gamble and served as its global sales officer before joining Tyson’s board.
The leadership change adds another layer to Tyson’s turnaround story.
Schomburger has emphasized operational execution, brands, customer relationships and innovation, while Tyson is simultaneously restructuring its beef operations and preparing for potentially changing cattle-market conditions.
But Tyson Still Has a Major Problem to Solve
The bullish thesis should not obscure the scale of Tyson’s current challenges.
The company expects its fiscal 2026 beef business to post an adjusted operating loss of as much as $775 million. Its total-company adjusted operating-income forecast has also been reduced.
Tyson now expects fiscal 2026 revenue growth of only 1.5% to 2%, down from its earlier forecast.
The cattle shortage remains particularly serious.
Reuters has described U.S. cattle supplies as being at historically low levels, with drought, herd reductions and disruptions to Mexican cattle imports contributing to the squeeze.
And even if Mexican imports continue reopening, USDA’s latest actions show that the screwworm threat remains an active issue.
In other words, Tyson’s recovery is not simply a matter of cutting costs.
The company needs the underlying cattle market to improve.
The Bigger Tyson Foods Story
JPMorgan’s September upgrade is therefore less about declaring that Tyson has already recovered and more about identifying a potential shift in the forces weighing on the company.
A smaller beef-processing footprint could eventually lower costs.
More Mexican cattle imports could gradually improve livestock availability.
A rebuilding U.S. cattle herd could eventually ease supply constraints.
Chicken can continue benefiting from value-conscious consumers.
Prepared Foods and Tyson’s branded portfolio can provide another source of earnings stability.
But each of those developments has a different timetable, and some remain uncertain.
For now, Tyson is still navigating a difficult cattle cycle while trying to protect its stronger businesses.
The intriguing question for investors is whether the company’s worst beef pressures are approaching a turning point — or whether the cattle shortage will keep pushing that recovery further into the future.
JPMorgan’s new rating suggests Wall Street is beginning to focus on what could happen after the current crisis.
Tyson’s next few quarters will determine whether those anticipated tailwinds actually translate into stronger earnings.
