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Pro Analysis

Top-ranked analyst: Avoid Tyson Foods

Tyson Foods Inc.
Andrew Harrer | Bloomberg | Getty Images

Investors should avoid Tyson Foods shares now because of higher feed costs and valuation, according to BMO Capital Markets. The stock of the chicken, beef and pork food production company is up 18.5 percent this year as of Friday's close.

"Our case for aggressively investing in TSN is less persuasive at current valuations and as expectations continue to build despite a surge in feed costs particularly soybean meal," BMO Capital Markets' Kenneth Zaslow wrote in a note to clients Monday.

"We would not be surprised if further valuation expansion were to be limited as TSN likely will generate the majority of its 2017 EPS growth from non-operating items (e.g., interest expense, share repurchases)."