After the U.S. stock market pushed to all-time highs, a new level attributed to the hype born off the technology sector, few other stocks became as interesting as semiconductor players and artificial intelligence names. Far from being a Nvidia Co. (NASDAQ: NVDA), a consumer staples – known for being boring – stock could be about to steal the spotlight. 

Based on fundamentals, Tyson Foods Inc. (NYSE: TSN) is connecting all the dots for Wall Street to return it to its former glory. After selling off by more than 55% from its all-time high price, this stock became an overlooked—even disposable—name for any investor. 

The way things are going, investors looking for better odds to beat the market could connect the dots behind Tyson stock's massive earnings per share (EPS) growth projections and its double-digit upside set by analyst price targets. But before all the excitement brews larger, here is why Tyson stock may still be as good a play as ever. 

It's All About Feed Prices

The Federal Reserve (the Fed) needed to cut interest rates to near zero due to the 2020 COVID-19 pandemic. The subsequent effect was stubbornly high inflation rates, which affected total ticket prices at the supermarket. 

Investors quickly realized (as judged by the aggressive sell-off in Tyson) that food manufacturers' costs also increased. Sentiment for these players became so negative that inventories depleted to cyclical lows, according to data from CF Industries Holdings Inc. (NYSE: CF). 

Within its fourth quarter 2023 investor presentation, CF showed that global grains stocks-to-use ratios reached a decade low during 2021-2022, helping feed costs rise. As these costs rose, margins at Tyson depleted to dangerously low levels, especially for beef and chicken. 

Needing to bring these stocks back to normal levels, the agricultural industry is ramping up production again. According to the ISM services PMI index, the agricultural sector pushed out three consecutive months of growth, showing the growing need for global food supply chains to normalize again. 

This is where Tyson's opportunity comes in, as its margins could expand after feed costs give the company's operations some breathing room.

Tyson's Beef: Investor Bullseye

In its first quarter 2024 earnings release, Tyson's trends show a clear opportunity to make a comeback. Beef's average price change jumped 10.5% higher year-on-year, bringing its total sales to $5 billion (roughly 37% of all sales).

Chicken, the second largest business at $4 billion in sales (30% of total), saw its average sales price decline by 3.9%. Tyson's competitor, Pilgrim's Pride Co. (NASDAQ: PPC), showed its investors that soybean stocks are back on the rise, ending the first quarter of 2024 12% higher than the previous year.

This is the effect brought about by CF's numbers: Farmers need to ramp up inventories, which helps reduce costs for meat manufacturers like Tyson. In fact, Tyson's chicken operating margins rose from 1.6% to 4.4% over the year. But what about beef?

Well, beef margins were a significant issue during the quarter, as they contracted to negative 4.1% from 3.5% a year prior. However, this contraction isn't all bad news, as farm-to-wholesale beef costs have been declining since 2021, approaching 2018. 

Urea prices, a main ingredient in cattle feed, have declined significantly during this period. Nearing pre-pandemic levels could help Tyson's beef margins return to positive, considerably boosting its future EPS. 

Wall Street Sees A High Probability of Rallying

Analysts project up to 58% EPS growth in the next 12 months, compared to competitor Pilgrim's Pride's expected advance of only 2.6% this year. This gap comes from Tyson's exposure to meats beyond chicken and its superior market share. 

For twelve months, Tyson's market share stood at 11.8%, topped only by privately held Cargill. Pilgrim's Pride came in second place at 3.9%, a fourth of Tyson's grab. 

Noticing this big gap, and as a rising VIX brings on feelings of uncertainty, analysts at Barclays (NYSE: BCS) and Citigroup Inc. (NYSE: C) boosted their valuations for Tyson. 

Being part of the Consumer Staples Select Sector SPDR Fund (NYSEARCA: XLP) and low beta stocks in its 0.75 beta, Tyson earned a $69 price target from Barclays and a $62 valuation from Citigroup, calling for a respective upside of 15% and 3.3% from today's prices. 

Despite its sluggish price action, underperforming Pilgrim's Pride stock by more than 60% over the past 12 months, Tyson stock bears retreated from the name. Short interest fell by more than 21% in the past month, bringing the total percentage of shares short down to 1.7%. Bulls may be getting all over this stock.