3 Meat Stocks Worth Watching Amid Robust Industry Trends

The Zacks Food – Meat Products industry is experiencing strong growth, driven by increasing consumer demand for high-protein foods and a heightened focus on health and wellness. To stay competitive, leading companies are diversifying their product portfolios, boosting production capacity and investing in innovative plant-based meat alternatives.

Despite challenges such as rising input costs and increased operational expenses, top players like Tyson Foods, Inc. TSN, Hormel Foods Corporation HRL and Pilgrim's Pride Corporation PPC remain well-positioned for long-term growth. Through strategic initiatives and responsiveness to shifting consumer preferences, these companies continue to enhance their market presence and profitability.

About the Industry

The Zacks Food – Meat Products industry comprises companies that manufacture, process, market, distribute and sell a wide range of meat products like chicken, pork, beef, prepared food and plant-based meats. Some companies also offer poultry and turkey products, alongside providing nutritional food products and supplements, desserts and drink mixes and industrial gelatin products. Most companies offer their products to retail and foodservice customers, while some cater to deli and commercial operators, including grocery retailers, grocery wholesalers, meat distributors, warehouse club stores, industrial food processing companies, chain restaurants, international export companies, school cafeterias and hospitals, among others. Some products offered include frozen whole chicken, primary pork cuts, salads, sandwiches and meatballs. 

Major Trends Shaping the Future of the Meat Food Industry

Increased Protein Demand & Plant-Based Alternatives: The growing popularity of high-protein diets is fueling significant growth for meat companies, pushing them to constantly innovate their product offerings. This shift is largely driven by increased health consciousness, particularly among fitness enthusiasts following high-protein regimens like the keto diet. At the same time, the demand for plant-based meat alternatives is gaining traction as more consumers opt for healthier, fresher choices over conventional meat products. These plant-based alternatives are favored for their minimal use of artificial ingredients and additives, making them a more wholesome option. Industry experts believe that plant-based protein could significantly disrupt the traditional meat industry, positioning itself as a formidable contender in the broader protein market.

Strategic Expansions: Meat companies are boosting their market presence by diversifying product lines and implementing strategic growth strategies, including mergers, acquisitions, and capacity expansions. To improve production efficiency, many businesses are investing in new manufacturing facilities, upgrading current plants, and forming partnerships with co-manufacturers. In addition, several companies are embracing automation and advanced technologies to drive digital transformation and optimize operations. A number of meat industry players are also focusing on expanding into international markets, where they are witnessing favorable results and strong growth opportunities.

Cost-Related Challenges: Meat producers are facing significant cost-related challenges as rising input costs continue to strain operations. Soaring prices for feed, raw materials, transportation, and labor are driving up production expenses, while persistent inflationary pressure is squeezing profit margins. This inflationary environment is also reshaping consumer behavior, with shoppers making more frequent store visits but purchasing less per trip — an indication of tighter household budgets. As economic uncertainty persists, even affordable protein options like chicken may see softened demand, potentially reducing sales volumes and impacting overall profitability.

Zacks Industry Rank Indicates Bright Prospects

The Zacks Food – Meat Products industry is housed within the broader Zacks Consumer Staples sector. The industry currently carries a Zacks Industry Rank #93, which places it in the top 38% of more than 250 Zacks industries.

The group’s Zacks Industry Rank, which is the average of the Zacks Rank of all the member stocks, indicates encouraging near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

The industry’s positioning in the top 50% of the Zacks-ranked industries is a result of a positive earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually gaining confidence in this group’s earnings growth potential. Given the industry’s bright prospects, we present a few stocks that you may want to consider for your portfolio. However, before that, it’s worth taking a look at the industry’s performance and current valuation.

Industry vs. Broader Market

The Zacks Food – Meat Products industry has underperformed the broader Zacks Consumer Staples sector and the S&P 500 over the past year.

The industry has declined 7.8% over this period against the broader sector’s growth of 3% and the S&P 500’s rise of 11.6%.

One-Year Price Performance

Industry's Current Valuation

On the basis of forward 12-month price-to-earnings (P/E), which is commonly used for valuing Consumer Staple stocks, the industry is currently trading at 12.50X compared with the S&P 500’s 21.83X and the sector’s 17.80X.

Over the past five years, the industry has traded as high as 21.76X and as low as 12.24X, with the median being 16.55X, as the chart below shows.

Price-to-Earnings Ratio (Past Five Years)

3 Meat Food Stocks to Keep a Close Eye On

Tyson Foods: This Zacks Rank #3 (Hold) company stands as a leading force in the protein industry, offering a broad portfolio of chicken, beef, and pork products. Its diversified multi-protein strategy enables Tyson Foods to effectively manage industry fluctuations while meeting the growing consumer demand for high-protein diets. Backed by trusted brands such as Tyson, Jimmy Dean and Hillshire Farm, the company enjoys strong brand recognition and deep household penetration. Tyson Foods is also embracing digital transformation and AI-powered technologies to optimize supply chain efficiency and boost consumer engagement. With a resilient business model and a robust multi-channel approach, Tyson Foods is well-positioned for sustained long-term growth in the evolving protein market. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for TSN’s current fiscal year earnings per share (EPS) has moved down from $3.87 to $3.85 in the last seven days. Tyson Foods has a trailing four-quarter earnings surprise of roughly 34.7%, on average. Shares of TSN have declined 1.1% in the past year.

Price and Consensus: TSN

Hormel Foods: This Zacks Rank #3 company is driving growth through strong momentum in its Foodservice segment, supported by a differentiated product portfolio, deep customer relationships, and a broad channel presence. The company’s commitment to innovation is evident through new product launches that align with changing consumer preferences, reinforcing the strength of core brands like SPAM, Jennie-O and Skippy. Hormel Foods’ Transform and Modernize initiative is enhancing operational efficiency by streamlining processes, centralizing key functions and reducing portfolio complexity, all aimed at long-term strategic growth. Strategic investments in capacity expansion, technology, and infrastructure are further strengthening its scalability and efficiency.

The Zacks Consensus Estimate for HRL’s current fiscal year EPS has remained unchanged at $1.61 over the past 30 days. Hormel Foods has a trailing four-quarter negative earnings surprise of 1.2%, on average. Shares of the company have gained 0.2% over the past year.

Price and Consensus: HRL

Pilgrim’s Pride: This Zacks Rank #3 company is a leading producer, processor, and distributor of fresh, frozen, and value-added chicken and pork products. The company is driving sustainable growth by diversifying its product portfolio, expanding its range of branded offerings, and strengthening customer partnerships. Pilgrim’s Pride benefits from strong demand, particularly in the foodservice sector, which supports its solid market position. Strategic investments in capacity expansion and innovative technologies are helping the company adapt to evolving consumer preferences. In addition, by implementing effective cost management strategies, automation, and operational efficiencies, Pilgrim’s Pride continues to enhance its profitability and long-term competitiveness. 

The Zacks Consensus Estimate for PPC’s current fiscal year EPS has remained unchanged at $5.41 over the past 30 days. Pilgrim's Pride has a trailing four-quarter earnings surprise of 19.6%, on average. Shares of the company have jumped 39.2% over the past year.

Price and Consensus: PPC

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Tyson Foods, Inc. (TSN): Free Stock Analysis Report
 
Hormel Foods Corporation (HRL): Free Stock Analysis Report
 
Pilgrim's Pride Corporation (PPC): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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