United States-Tyson Foods Inc the worlds largest meat processors.

UNITED STATES-TYSONS BACK IN FAVOR ON WALL STREET.

Shares of Tyson Foods Inc., the world’s largest meat producer, rose on Wednesday after an analyst upgraded the stock, saying there were fewer concerns about its debt levels and improving pricing in the company’s suffering chicken business.

Shares rose 37 cents, or 4.4 percent, to close at $8.86 Wednesday.

On Monday the Springdale, Ark.-based company said it has secured a new $1 billion credit line and closed a previously announced offering of $810 million of senior notes.

JPMorgan analyst Ken Goldman wrote in a note to clients Wednesday that these moves minimize the risk the company could trip its debt covenants - a major concern for investors.

He upgraded the company’s shares to "underweight" from "neutral" and noted the company also stands to gain from improving pricing in its faltering chicken business.

The entire meat industry is hurting - especially the low-margin chicken business - as meat producers work through ingredient costs that reached record highs over the summers. An oversupply of meat on the market has limited pricing, and slumping demand due to the weak economy has also hurt the industry.

But Goldman said production cuts will help bolster pricing, which has risen in the past two weeks to $1.45 a pound for chicken breasts from $1.25 a pound.

"We are increasingly confident the higher prices can be maintained," he wrote, citing plant closures by the nation’s largest chicken producer, Pilgrim’s Pride (nyse: PPC - news - people ) Corp., which will remove about 2 percent of U.S. chicken production.

The Pittsburg, Texas-based company, saddled by debt and high feed costs, filed for Chapter 11 bankruptcy protection late last year.

Although the chicken business is improving, there are other factors that could hurt Tyson, both Goldman and BMO Capital Markets analyst Kenneth Zaslow said.

Zaslow called Tyson’s outlook "mixed" in a note to clients Wednesday, saying that the improving chicken business could be hurt by weaker beef and pork performance.

Goldman said that he was "not particularly optimistic" about Tyson’s near-term beef and pork prospects. He said margins in both businesses have been negative in the last couple of weeks, and the situation may not improve as consumers pull back on their spending.

"The worse the economy gets, the less cash consumers have for relatively expensive meats," he wrote.