Sysco Corporation (SYY), headquartered in Houston, Texas, markets and distributes various food and related products to the foodservice or food-away-from-home industry. Valued at $37.5 billion by market cap, the company also distributes personal care guest amenities, housekeeping supplies, room accessories, and textiles to the lodging industry.
Shares of this leading global foodservice distribution company have underperformed the broader market considerably over the past year. SYY has gained 4.7% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 21.7%. In 2024 alone, SYY’s stock rose 3.1%, compared to the SPX’s 13.9% rise on a YTD basis.
Narrowing the focus, SYY has outperformed the iShares US Consumer Staples ETF (IYK). The exchange-traded fund has gained about 1.6% over the past year. However, the ETF’s 7.2% gains on a YTD basis outshines the stock’s returns over the same time frame.
On Jul. 30, SYY shares closed up more than 4% after reporting its Q4 results. Its adjusted EPS of $1.39 beat Wall Street expectations of $1.38. The company’s revenue was $20.6 billion, beating Wall Street forecasts of $20.5 billion. Its adjusted EBITDA of $1.30 billion was better than the consensus estimates of $1.26 billion.
For fiscal 2025, SYY expects a 4% to 6% growth in net sales, a 6% to 8% growth in adjusted EPS, and a 9% to 11% growth in total shareholder returns.
For the current fiscal year, ending in June 2025, analysts expect SYY’s EPS to grow 6.7% to $4.60 on a diluted basis. The company’s earnings surprise history is impressive. It beat the consensus estimate in each of the last four quarters.
Among the 15 analysts covering SYY stock, the consensus is a “Strong Buy.” That’s based on 11 “Strong Buy” ratings, and four “Holds.”
This configuration is more bullish than three months ago, with ten “Strong Buys.”
On Aug. 1, Deutsche Bank analyst Lauren Silberman maintained a “Buy” rating on SYY with a price target of $86, implying a potential upside of 14.1% from current levels.
The mean price target of $85.25 represents a 13.1% premium to SYY’s current price levels. The Street-high price target of $91 suggests an upside potential of 20.7%.
On the date of publication, Neha Panjwani 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.
