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On Today's Bloomberg Intelligence Show, we dig inside the big business story some inm Pacnew Wall Street and the global markets.
Each and every week we provide in depth research and data on some of the two thousand companies and one hundred and thirty industries our analysts cover worldwide.
Today, we'll take a look at why there may be prolonged legal battle over whether TikTok will be banned.
Plus we'll discuss how and why one company thinks most banker bonuses will rise in twenty twenty four.
But first we dive into the world's largest media and entertainment company Walt Disney.
The company reported second quarter earnings that surpassed analyst expectations, but this was overshadowed by the company giving a week outlook for streaming subscriber growth in the current quarter.
For more, guest host Tim Stenovick and I were joined by Githa Ranganathan, Bloomberg Intelligence analysts on the US media space. We first asked Getha for some of her key takeaways from Disney's results.
What the street didn't like was the outlook. The outlook for the fiscal third quarter, especially for the theme park business, was definitely weak and not something that the street was expecting. So consensus had a twelve percent growth in operating income for the park's business. What Disney said zero growth. Wow, And that kind of really spooked investors. And they talked
about different aspects here. They said that they have, you know, three new cruise ships that are basically coming on board, and you know there are launch costs associated with that. They're also opening this new kind of private island along with their vacation club and cruise business. Of course that also, you know, is contributing to that. But I think what really has investors super nervous. Is that they spoke about a moderation in demand, and this has been a constant,
constant question for Disney. You know, can that park's momentum sustain and how long can it sustain? And will they have pricing power? And I think people are not so confident anymore.
Is the moderation of demand about Disney's lack of exciting things to draw in people to the parks, to draw people to the theaters, or is it about a story that has to do with the consumer and the way that the consumer feels strapped.
I think it's a little bit of everything. Tim So, you know, definitely the consumer, the overall health of the economy and the consumer for certain and you know, tremendous inflationary pressures. But of course for Disney, you know, one thing that they've done over over the past few years is they've really raised prices in their parks pretty dramatically, and it's becoming increasingly increasingly expensive for you know, affect family vacations, so to the point of almost becoming prohibitive.
And you know, that's where kind of that whole pricing power question comes in. I think they're going to have to do it much more cautiously and gently in the future.
Paul talking to some neighbors the other day who recently took their kids to Disney. Yep, they were adding up how much it costs for just a couple of days down there. They were saying, probably about five grand is what they spent in Florida. Wow, two kids a few days down there.
Wow, it's a lot of money. I just called I just called Githa. She makes a phone call and I'm like the front of the line every time. Eithan. The other part of this story, And for the longest time, you know, the last four or five years, has been their streaming business and when will that business term profitable? They had some pretty good news on that front, didn't they.
They did, Paul.
I mean, we're just on the cusp of a major, major earning inflection point here for the first time ever in the in the streaming business's history, they actually posted them all this profit now again, they said fiscal third quarter, which is the next quarter, is going to be a
little bit choppy. But then what they've said all along is that expect some some really good results in the fiscal fourth quarter, and then they're really going to build on that starting in you know, fiscal twenty twenty five and beyond. They have a lot of initiatives in the works. You know, they're cracking down on password sharing a la Netflix, and remember that has been a huge growth story at Netflix.
The Netflix aded almost thirty five million subscribers after they started cracking down on password sharing, So Disney can also hope to see quite a lot of success with that. And then of course they also have the Hulu integration as well as you know, the ad tier, all of that kind of contributing. So streaming, I think is going to be a considerable source of earnings upside in the next few years.
How's Bob Ayger doing?
Does he have an ex successor?
He spoke about that actually on the call that that came up, and he said that they're, you know, they're kind of actively considering. They have four internal candidates, the all of the division chiefs, the chiefs that are kind of up for consideration, and you know, he said that they're looking at them very carefully and the announcement will come when the time is right.
Is this any replay of what happened a few years ago when Jpek took over? I mean It kind of sounds familiar. A number of internal candidates, the person gets picked, the other one's leave, and then Bob Ager comes back because it didn't work out.
Yeah.
I mean we've seen this movie play out so many times now at Disney. I hope and I think this time it really will be different. I mean, that was the whole bone of contention, you know, for the activist investors, including Nelson Pals and I think having this new succession planning committee suggests that this time they will do things probably a little bit differently.
What did the companies say about their ability to potentially deal with maybe weaker demand. It's been a long time since we've seen them ever cut prices at the theme parks, promote, you know, at the theme parks, anything that would hurt profitability. It's been a long time since they've had to do that.
Yeah, I mean, the theme park business has been such a consistent story for them, Paul, as you just pointed out, they have twenty five percent operating margin in that business, and they are really looking at this as a future earnings growth driver, which is why you know they're investing sixty billion dollars in the theme parks over the next ten years. Over half of that is basically just adding capacity, adding new attractions, and I think it's it's a really
timely and a good strategic move. They're also bringing on those cruise ships that that's going to cost them about twelve to fifteen billion dollars, so you know, they're definitely adding capacity. So I think, you know, overall, definitely the business is in good shape, but in the near term, obviously, the sentiment has definitely soured.
Our Thanks to Geitha rang Andath and Bloomberg Intelligence analysts on US.
Media, we move next to the chip maker Intel. This week, the company said it now expect second quarter revenue to fall below the midpoint of previously issued projections.
This comes as a result of the US revoking licenses allowing Huawei Technologies to buy semi conductors from Qualcomm and Intel. The move is aimed at preventing China from developing advanced artificial intelligence.
For more on all of this, we were joined by Michael Sheppard, Bloomberg News senior editor. We asked him first to walk us through the revenue pain that Intel will see from this.
For Intel, the company is under some pressure to produce on the turnaround that Pat Gelsinger has outlined to try to get the company back into the vanguard of manufacturing, but here in the US in particular, So analysts are out there looking for any sign of potential trouble for Intel as it tries to execute this plan. And here, even though we're not seeing a significant market for Intel with Huahwei, nonetheless any sign of trouble is something that they have to take into account.
So, you know, for I guess the bigger picture here as you step back, it just feels like this technology cold war between China and the West, China and the US, it seems to we're just intensifying. Is that the feeling in Washington is that where Washington really wants to take this.
But Paul, I'm glad you brought it up that way in those terms, because we really are seeing much more of a frost when it comes to technology. Settling in the US has been making clear. We heard Commerce Secretary Gina Raymunder just a few weeks ago say technological security is national security, and they are drawing a line when it comes to the more sophisticated and more advanced technology,
especially when it comes to computer chips. The US is a leading innovator, if not a leading producer, of some of the most advanced and tiniest semiconductors that are out there powering technology everywhere. And one of the emerging fronts is,
of course, artificial intelligence. And we spoke to House Foreign Affairs Committee Chairman Michael McCall, who's been pushing for these Quawei restrictions, and he said, the idea of the export controls that we reported on yesterday was to keep the most advanced AI tech out of China's hands.
What about tech that's already in their hands that then China can adapt themselves. Wasn't there like a Huawei phone that really scratched everyone's head on like what kind of chips they actually used? I mean, how do you restrict that kind of stuff?
Well, the US is actually investigating what happened with the May ninety. This device was unveiled as Gina Raimondo was visiting China and it was taken as a you know, something that was aimed directly at her during her visit to say that, look, you're trying to put these restrictions in place, we will show you.
Now.
The US has launched an investigation into how Huawei was able to develop it, and whether there are other companies that are forming this shadow network of suppliers to Huawei, in other words, creating proxies that allow the device maker to obtain the chips that it otherwise can't.
So what's the response been from China? What can we It's just gonna be a tit for tat type of thing. So I'm Tim Cook, I'm paying attention here.
Well, American technology executives should be watching this space. China responded, calling the moves economic coercion and a violation of what it sees as World Trade Organization rules, and they may very well decide to proceed with the case. At the same time, the US is trying to draw a line around the whole question of national security, and that is going to be something that we see as a tension
point between the two countries. The US is made clear that it wants to do business with China, but just not that far. It is only willing to go so far when it comes to trade in more advanced technologies. It wants to preserve the American edge here at home.
How hard is it for Intel to make up that revenue elsewhere?
You know, it's a good question It's unclear exactly how much they would be losing here. It was only a slight drop. If you read between the lines on it. You know they're now seeing something more to the midpoint of their guidance, but it is still within the revenue that they projected between twelve and a half billion and thirteen and a half billion.
You know, Michael, we've all grown up with Intel, and you know kind of I guess we now consider kind of the older generation of Silicon Valley of technology. It appears that they just have not been able to catch that AI wave, at least from investors perspective, in any way, shape or form. Is there any optimism that maybe they can infect pivot their company to go to where the puck is going, which is for AI.
Well, Paul, we all remember the Intel inside jingle from those ads years ago, and that is something that Pat Gelsinger is really trying to recapture, and he is seizing upon the Biden Administration's Chips Act all those investments. We're seeing the company launch plants in Arizona and in Ohio. We just profiled the construction of this new facility in Ohio was really impressive. Look inside what they are trying to build there. It's ambitious, but it will take some
time too. These plants can't be built overnight, and it is a race against the clock when it comes to AI.
Our thanks to Michael Sheppard, Bloomberg News Senior editor.
Coming up, we'll break down Apple's online launch event from this week's dubbed let Loose.
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We moved now to big tech and Apple. Apple had its online launch event Tuesday dud let Loose, and the company unveiled a new artificial intelligence focused iPad pro and larger iPad Air.
The goal is to reinvigorate a tablet lineup that has languished the past two years.
For more.
Guest host Tim Stenevick and I were joined by Man Deep, saying Bloomberg Intelligence senior technology analyst. We first asked man Deep about how important the new iPads are to Apple.
iPad line is about a high single digit contributor to their overall revenue, so not as big as the iPhone, of course, but clearly you know they are trying to put their.
Latest chip in the iPad.
They showcase a new keyboard for the iPad and there were other battery announcements new all at display. So all these are cool, but fundamentally you have to ask yourself, is it, you know, worth to upgrade to a new iPad with all these incremental features as I would like to call And that's where I think the market is anticipating more along the lines of what can you show me in terms of AI and the wow factor around LMS?
And I think that's what was messing at the event.
Well what could they show? I mean, when we talk about AI and Apple, what are we thinking about? Because Mark German says that this is an AI focused pro model, So I'm wondering, apart from the chip, what about it is AI.
It's at the app level, so that's why that operating system upgrade.
And they did talk about the iOS eighteen.
Look right now, the current version of my iPad, which is five generations behind what they launch, can run the latest version of the iOS operating system. So why do I need to upgrade? They have to give me a reason to upgrade to the latest iPad because my current version can't run the operating system and it's got some cool apps.
That is what was missing, Like what.
Functionality can you show me around Siri, around image editing, around summaries, like all the cool stuff that we talk about from Nvidia at the data center level. That's what a small kind of version of it is what you want to run on device instead of going to the cloud.
And that's what they got a showcase in terms of why you need to upgrade to the latest hardware.
Okay, so Paul, this is not our first rodeo. You and I have anchored before, and one thing that's different than versus a few years ago. When I would walk in here, you would have an iPad next to you.
Yep.
And the iPad you told me was like a really big part of how you prepared for the show, use the Boomberg terminal on the iPad. You also have the two screens for the terminal. You have no iPad anymore? Nope, why not?
I still have the iPad, although it's probably the original version, but now everything's on the phone.
So your phone has replaced your iPad absolutely.
And I have a very long train ride every day, which I need a very engaging device, and your.
Phone is that it's not the iPad. So, man, deep, how big of a problem is that for Apple?
I mean, look in their case some of their newer products to cannibalize. You know, if the eye pad is very good, it's going to cannibalize the Mac sales. And if the iPhone is very good, it's going to cannibalize the iPad sales.
So that's always been the case.
But it's still a very sticky operating system, and you know, just ecosystem overall. The only problem that I think people are trying to grapple with here is what is the refresh cycle? Because right now, the refresh cycle continues to get longer and longer.
It's not as if, you know, people.
Are moving out of the ecosystem, but they're not gaining more Android users because they don't have the best looking phones or the best features that Android phones can offer, and so that is the part that is hurting their refresh rate and also the share gain from Android users.
Is there a chance in your June developer meeting that they're going to come out with something that's going to blow the street away or expectations low?
I mean, I'm expecting more emphasis on the software side in that developer meeting, and clearly they need to showcase what they are doing around the LM's trap, whether an LL and large anguid model will be part of their OS, and then how it influences the overall app ecosystem because that those are the features. If you look at the latest Pixel phone, they offer you a lot of those features already on Android, and that's what the Android ecosystem
is looking to leverage more and more. Off look at the latest Samsung phones, they are targeting a lot of those JNAI features and Apple is really playing catch up over there, and they need to showcase that at.
The WWDC when they have all the developers over there.
Meande, this is something you think about a lot. So lay out the ultimate vision for us. What does Apple want its devices to be able to do for us from an AI perspective, like how is it going to interact with me using AI?
I mean, the biggest kind of UI upgrade they can offer is around this sery. You know the fact that Siri is so underutilized right now as a voice assistant. If it has the right set of JENNYI features, clearly that will have a big influence and how we interact with the next version offer of the phones they make. And also you know some of the utility inside the app, like you don't have to you know, kind of touch everything or do everything manually in terms of giving instructions.
There is this concept of AI agents that has to be front and center in the next version of software that Apple offers within their operating system, so that AI agent can automate a lot of the tasks, not fully, but pieces of it. And you want to see Apple making progress.
On that front thanks to Man Deep Seeing Bloomberg Intelligence Senior Technology Analyst.
You move now to social media and there may be a prolonged legal battle now on the horizon involving the popular video sharing app TikTok.
TikTok is owned by China based Byte Dance, this week, the company filed a legal challenge to a measure signed by President Biden last month. That measure with ban TikTok in the US, if ByteDance hasn't divested from the app by January nineteenth.
The potential ban is meant to address national security concerns that the Chinese government could access user data or influence what's scene on the TikTok platform.
For more, we were joined by Matthew Schuttenhelm, Bloomberg Intelligence media litigation analysts. We first asked for his take on this week's news.
This is the first Amendment lawsuit that we expected TikTok to bring, basically saying that Congress's action violates its First Amendment rights, that it, like any other platform, think about the New York Times or any other media outlet. If Congress were to effectively ban it, that it violates the First Amendment to do so unless Congress can pass a
pretty tough test. And so I think this is a pretty substantial First Amendment case because we've rarely seen Congress take such drastic action with respect to such a major media platform.
We hired Matt He was just a kid's got gray hair. I know, I don't know what happened exactly as a grizzled veteran there, Matt, I know it's important which court these things go to. So tell us where you think this case will be litigated initially and kind of how that might play.
Yeah, So this one's pretty easy to figure that out because Congress limited where the companies can sue, and they said any suit can only be filed at the DC Circuit here here in Washington, which is sometimes referred to as the second most important court in the United States, below the US Supreme Court. This is a court that takes most of its cases actually involved challenges to US government action, usually agencies the alphabet soup of agencies.
The FCC, the FAA, the E p A.
But here it's Congress actually taking the action. So this is a pretty experienced court. This won't allow a single judge to go out and sort of make a name for himself with an opinion. This will be a three judge panel of very experienced judges, and then the only appeal option would be to the Supreme Court after that.
Does it violate the First Amendment free speech rights?
So I think it's it's a strong argument that TikTok presents. This is not an easy case on either side. What the court is going to look at is whether there is an important interest that Congress was trying to serve and whether it tried to address that interest in an appropriate and narrow way. Did it burden more speech than is necessary to go after the interest? And one of the things that the government has going for it here
is that this is a national security question. I think if this were just an agency trying to do this, I think that the DC Circuit would would have issues with the state of the record here and require it to do There's very little evidence in the legislative record about what exactly is the risk and what exactly why Congress needed to pursue this avenue versus another avenue. If an agency did this, a court would would have issues
with it. But this is Congress. This is our biggest policymaking body, and it's on national security, something these judges really know nothing about, and they're going to be be very careful about interfering. So at the end of the day, it's a close call, but I give the United States a slight edge because of that deference on national security questions where judges just aren't expert.
So let's just assume that maybe this DC District rules in favor of Congress. TikTok presumably would then take it to the Supreme Court. Do you think the Supreme Court would hear such a case?
Yeah, so every Supreme Court case is discretionary. They could say no. You know, I think more likely if the scenario were flipped, I think think the Supreme Court would take it that. If the d C Circuit rules initially in TikTok's favor, I think the United States would almost
certainly get a second chance at the Supreme Court. And that's one of the reasons why I like the United States chances here is that I see even if it doesn't go well for the United States at the d C Circuit, I think it might go better at the Supreme Court. It gets two.
Shots at it.
If the d C Circuit rules for the United States, I could see the Supreme Court saying, you know what, the d C Circuit got it right, we don't need to take it up and say the same thing. So it's definitely going to be on the Supreme Court's radar, assuming the timing fits, that's going to be the first question is how do you squeeze all this in on Congress's timeline by January nineteenth, we're supposed to have a divestiture. The courts usually take much longer than that.
Who argues this case on benf of the US government?
I would think it's pretty high level attorneys in the Attorney's General Office, potentially the Solicitor General of the United States if this goes to the US Supreme Court. This suit named Merrick Garland, the Attorney General, as the defendant, so I would think he would name one of his top attorneys to represent him and the United States in this case.
Our thanks to Matthew Shuttenhelm, Bloomberg Intelligence media litigation analyst.
Coming up in the program, we'll look at how and why one company thinks most banker bonuses will rise in twenty twenty four.
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We move now to banks and this week the financial services compensation from Johnson Associates predicted the bonuses on Wall Street would rebound this year, and the company said this applies mostly to desks that help companies tap markets or trade their bonds.
For more on all of this, I was joined by Alison Williams, Bloomberg Intelligence senior analysts Global banks and asset managers. I first asked, Allison, isn't May too early to be talking about bonuses?
I think so, Although the appetite for any incremental knowledge about compensation is insatiable, we just, you know, we've really just gotten sort of the look back at last year. We've had the first quarter of results. But you know, to your point, you know, it's a long way out. And I would say if you look at some of the estimates, I mean, some things seem sort of reasonable, right, So wealth and asset management, you know, the global markets
are close to record highs. Certain markets are you know, hitting highs and obvious, so their strength all around.
But we are in early.
May, but we look at some numbers, so the story I think, as you said, most bullish seemingly on bond trading revenues, and it's tough for us to see. You know, certainly it's possible to get a huge increase in fixed income trading, but fixed income trading has been doing well the last few years, and we do think that business is resilient. But when we say resilient, we say, you know, about in the range of last year. Similarly, equities again
about in the range. I mean where we think things are going to be much better than last year is that, you know, debt underwriting, equity underwriting. I mean, those are the businesses really strong in this quarter. But keep in mind they're coming off of a very low base. So you know, twenty twenty one was just an incredibly strong year. We've had really two really bad years, and compensation has
not really gone down to reflect that. It's gone down, but not as much as you would think, just because there was such a scramble in twenty twenty one for talent of the banks that we talked to you know, are cognizant of that, and they don't want to they don't want to go back to that. And we did hear a lot of encouraging things about the pipelines. As I said, one Q strength, so you know, out of all the numbers, maybe that is the most optimistic. But we are early in the year.
Hey Elison, on a typical bond desk or equity desk, how much principal risk of any do they take? Do their traders get to take positions or is most of the commissions that they report just kind of you know, agency trading on behalf of their clients.
So it's it's always a big mystery from the outside in terms of, you know, the types of risks and traders and banks will say since the global financial crisis that it's really hard to define and separate. I would say that certainly the proprietary trading that really fueled a lot of the banks around the time of the global financial crisis as certainly something that the regulators have attempted to scale back, and you can see in different business
models those that really do focus on the flows. I would also note that there are certain businesses that are really much more geared towards flows. So if we look at something like currency trading, very high turnover, high flow business versus something like asset back trading where it is much more specialized and you are using the balad sheet.
So for a typical trader out there these days, do we have a sense of what percentage of their compensation is really variable kind of year end bonus versus fixed salary. Like when I was on the street many years, in my total compensation, ninety percent of that would be bonus. And I understand it's changed a little bit as they've kind of try to increase the percentage of base salary, so it has changed.
I mean, that was sort of one of the interesting developments and perhaps unintended consequences that as we moved out of the financial crisis, regulators really wanted to limit that portion that was a bonus, and what ended up happening
was salaries ended up going up. So to your point, back in the day before the global financial crisis, you know, you could see salaries roughly equivalent across the board, but for someone on the lower end, their bonus was, you know, a fraction of their salary, whereas for someone on the higher end, their salary was a fraction of their total comp and so actually what that did for investment banks was really increased the volatility of the headcount, especially towards
your end, because if it was a bad year, investment banks, you know, could cut people, and since the majority of the payout was the bonus, it really kept that sort of higher correlation costs with revenues. But since then, because banks have tried to even that at a little bit, and certainly it is still a sizeable portion I think for the higher end, as I said, not as skewed as in the past, but certainly still can be skewed.
And I think I sort of grown into that over time, just because as I said, it can be so variable and so at least you know, if it is a bad year, there is some kind of floor that people can count on. But as we discussed, people reading these stories still thinking about the year and comp it really is something that is variable with the revenue. So to the extent that bonuses are looking good, the underlying thought would be that you are pretty bullish on the revenue for these banks.
Thanks to Alison Williams, Boombrig Intelligence senior analysts for global banks and asset managers.
We turned out to the largest US meat supplier, Tyson Foods.
This week, the company reported second quarter results that beat analyst expectations. Tyson also raised its adjusted operating profit outlook, citing improved performance of its chicken business, but this was way overshadowed by the company's CEO, Donnie King, saying that Tyson is quote not immune to the macro environment.
For more guestos, Tim Stenovic and I were joined by Jennifer Bartasha's Bloomberg Intelligence senior analyst Retail, staples and packaged Foods. We first asked Jennifer for her key takeaways from the company's earnings.
By all accounts, they had a pretty decent quarter. They did raise their full year outlook for adjusted operating income off of strengthen the chicken segment, which has been long awaited. But they may see third quarter be weaker than fourth quarter, which would buck historical trends. And so a little bit of a mixed report coming out of Tyson's. But generally a pretty solid quarter.
Is the current quarter usually strong because we're getting into summer. We got Memorial Day coming up. We buy the meat for the barbecue. I mean why is it typically stronger?
So only stronger for meats like you like your chicken, or you're in historically for beef specifically because a grilling season. But that does translate into a weakness for prepared foods and for the pork segment generally. And so they're saying that the weakness in prepared foods and pork may outweigh the strength coming for the grilling season for chicken and for beef.
All right, I'm looking at the PGeo function for Tyson Food TSN. Is the ticker percentage of revenue thirty seven percent beef, thirty three percent chicken, nineteen percent prepared foods and nine percent pork. Which business do you like? Which business does the street like? Is one better than the other? Better margins, better growth? How do we think about that?
So, historically speaking, prepared foods is a much higher margin business within the company, and there were intents from Tyson to grow that considerably. That has great long term potential, but they are going through a little bit of short term turbulence with regards to additional startup costs associated with
new plant lines and things like that. The chicken segment, which is a big part of the company's business has been underperforming for years, and so what's encouraging coming out of earnings is that the chicken segment is finally showing improvement. Margins are up, they're doing better with efficiencies, and even though overall volume is down, it's a much healthier margin
that they're achieving out of that chicken business. Now, remember they've closed a bunch of plants recently, they've been resizing their processing footprint, so all the things that they need to do seem to be underway to help make that a much more profitable and bigger contributor to the overall company.
We had kind of an interesting conversation about Tyson Foods and we all were all talking, well, we don't necessarily know necessarily the brand of whatever we're buying when we're in the store, and Tyson has much more than just Tyson Foods. Is this at its core a commodity company? Or do the brands Sarah le ballpark hillshar Arm, Jimmy Dean, Tyson, Bossco's Gallo Salami do these matter to consumers?
The brands do matter, and it depends on which consumer demographic you're talking about. But Tyson has intentionally over the past several years, moved away from being a strictly commodity driven company. That has helped smooth out earnings volatility. That helps make it a much healthier margin profile overall, and so that progress I think is going to continue. So those brands are very central to that long term plan.
That side. You're right, there is a lot of Tyson meat out there that you eat and you don't even realize it's Tyson. They you know, obviously will supply retailers that then have that as their private label brand. There are things like that that happen. But overall, what we're seeing is with the consumer, especially lower income households, have been trading more into private label and that has left these brands a little bit lower in terms of overall
volumes that's being sold. So that's where we're seeing a little bit a little bit of that brand volatile in the last few quarters.
Jen, you need to talk to investors in this company. What's the call here? I mean, are they do they own it for the dividend? Did they own it because they're bullush on chicken? I mean, what's the investment call for owning a food company like this?
Well, the dividend has been something that's been of appeal in recent years. The good news is that Tyson is back to where their free cash flower generation will cover the dividend. That also appeases some concern that the dividend might be cut. So generally it's been along those lines. There is also long term growth. Tyson has been slowly
expanding international operations. When they get the formula right, meaning they get the right productivity in the plants that they've opened up overseas, there's a long runway for potential growth for Tyson outside the United States as well as within the United States. So that's a little bit of the appeal as well if you're a longer term perspective investor.
Anything that investors have to keep their eyes on when it comes to supply issues out there, any bird flu avian flu type stuff that's getting into their production line that we've seen hit other types of companies.
Yeah, so the bird flu or avian flu is certainly something that's in the headlines lately. You know, we've seen outbreaks in very specific areas. Thus far hasn't really had a major impact on Tyson this year, but we are watching that very carefully. One of the longer term issues Tyson's going to face is just the beef cattle cycle. We're at the bottom of a cycle. There's very limited animal availability, and once that starts to rebuild, things are going to get a little bit worse before they get
better with regards to supply. That means that the profitability of the cattle, of the beef segment within Tyson is going to remain pressured well into twenty twenty five.
Our thanks to Jen Bartash's Bloomberg Intelligence Senior Analyst, retail stables and packaged.
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