Valued at $35.1 billion by market cap, Sysco Corporation (SYY) markets and distributes various food and related products to the food-away-from-home industry in North America and internationally. The Houston-Texas based company operates through the U.S. Foodservice Operations, International Foodservice Operations, SYGMA, and Other segments.
The food distributor is set to unveil its third-quarter results before the markets open on Tuesday, Apr. 29. Ahead of the event, analysts expect SYY to report an adjusted EPS of $1.03, up 7.3% from $0.96 reported in the year-ago quarter. While the company missed Street’s bottom-line estimates once over the past four quarters, it has met or surpassed the projections on three other occasions.
For the full fiscal 2025, analysts expect SYY to report an adjusted EPS of $4.56, marking a 5.8% increase from $4.31 reported in fiscal 2024. While in fiscal 2026, its earnings are expected to surge 7.7% year-over-year to $4.91 per share.
SYY stock has dropped 5.8% over the past 52-week period, notably underperforming the Consumer Staples Select Sector SPDR Fund’s (XLP) 10.9% gains and the S&P 500 Index’s ($SPX) 6.6% returns during the same time frame.
Despite beating Street’s expectations, Sysco’s stock prices dropped nearly 6% after the release of its Q4 results on Jan. 28. Driven by a notable increase in volumes, the company’s sales increased 4.5% year-over-year to $20.2 billion, exceeding analysts’ projections by a small margin. Meanwhile, it also experienced a positive impact from operating leverage, leading to a notable boost to its profits. Its adjusted EPS for the quarter increased 4.5% year-over-year to $0.93, matching the Street’s expectations.
However, over the past two quarters, Sysco has observed a notable increase in receivables and inventory levels, leading to a 41.8% year-over-year decline in operating cash flows to $498 million (aggregate of past two quarters).
Nonetheless, analysts remain optimistic about the stock’s prospects, with a consensus “Moderate Buy” rating overall. Of the 17 analysts covering the stock, 11 recommend “Strong Buy” while six advise a “Hold” rating. Its mean price target of $84.08 suggests an 18% upside potential from current price levels.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
