On January 8, 2026, BMO raised its rating on Tyson Foods Inc (NYSE: TSN) to Outperform from Market Perform and increased the price objective to $67. This upgrade follows the bank’s anticipation of an improving US beef margin outlook, catalyzed by Tyson’s upcoming US beef plant closure and expected federal biofuels policy clarity in early 2026. Shares currently trade near their historical average multiples despite recent earnings pressure, underscoring the perceived undervaluation that supports BMO’s positive call.

BMO Upgrade Anchored by Beef Margin Recovery and Biofuels Policy Insight

BMO’s upgrade emphasizes a turnaround in US beef fundamentals set for 2026. Tyson’s announcement to close a US beef processing facility later this month is positioned to reduce excess capacity, initiating margin improvements after a challenging 2025. In parallel, the US government’s near-term finalization of biofuels policies—expected in the first quarter of 2026—is projected to tighten supply-demand dynamics in oilseeds, renewable diesel feedstocks, and biofuels, thus bolstering margins.

This policy clarity is likely to benefit agribusiness companies with significant biofuels exposure. BMO specifically highlights Bunge Limited (NYSE: BG) and Darling Ingredients Inc (F:43D) as preferred picks, given their leverage to the growing renewable fuels demand. Meanwhile, other segments such as crop merchandising and sweeteners may continue encountering headwinds from global supply-demand imbalances. Notably, chicken and non-US beef segments are forecast to remain margin strong throughout 2026.

Operational Adjustments and Trade Policy Enhancements Strengthen Tyson’s Prospects

The planned US beef plant closure addresses capacity overhangs, expected to spark an initial rebound in beef industry margins from 2025 lows. Moreover, BMO notes the potential reopening of the US border to Mexican cattle imports, which could provide an additional upside layer to margins and support a sustained multi-year recovery trajectory. This capacity rationalization is likely to align with gradual increases in cattle supplies over time, facilitating margin expansion.

Coupling this improving beef outlook with solid operational performance in Tyson’s chicken and pork divisions, BMO forecasts earnings growth that outpaces current market valuations. The firm quantifies Tyson’s earnings sensitivity, estimating each $100 million increase in beef segment profits may contribute an added $0.20 to $0.25 per share annually. This illustrates the stock’s significant leverage to a recovery in US beef margins.

Upgrade: Market Outlook

BMO’s upgrade to Outperform with a $67 price target underscores confidence that Tyson Foods stands to gain from the dual momentum of plant capacity management and regulatory biofuels clarity expected in early 2026. Additionally, potential improvements in cross-border cattle trade with Mexico complement this positive outlook. These factors not only enhance Tyson’s position but also signal broader strength for agribusiness firms linked to biofuels and renewable feedstocks, such as Bunge Limited and Darling Ingredients.

Investors are advised to monitor Tyson’s execution of operational changes and evolving US regulatory developments, which remain critical to realizing margin and earnings improvements. Given shares trade near book value of approximately $51 to $52, this upgrade captures an opportunity where improving fundamentals may not yet be fully incorporated into the current share price, supporting BMO’s call on Tyson’s stock in early 2026.