Tyson shares advances on higher forecasts

Shares of Tyson Foods Inc. advanced on Wednesday as analysts raised their ratings and estimates for the meat maker, saying signs are pointing to an improving chicken industry.

The Springdale, Arkansas-based chicken, beef and pork producer saw its stock gain US$0.46, or 3.5 percent, to US$13.61 in trading.

Analyst Kenneth Zaslow increased his price target for the stock to US$15 from US$12 based on improving pricing in the chicken industry.

The meat industry - particularly chicken - has slumped as producers recover from ingredient costs that reached record highs last summer. Those high prices, coupled with slumping demand as consumers cut back on their restaurant eating, hurt profit margins.

According to Zaslow, prices for leg quarters per pound are US$0.50 for next month, above his estimates of mid-40s.

Earlier this month, Tyson posted a second-quarter loss that was larger than expected due to declining beef sales and one-time costs. It said its chicken business started to turn profitable in late February, as input costs tapered off and an industry-wide production drop bolstered pricing.

Zaslow said Tyson is benefiting from a shift in consumer demand to at-home eating. Tyson has said its chicken products are selling well since consumers consider them a lower-end meat.