Research Analysts’ Recent Ratings Updates for SYSCO (SYY)

A number of research firms have changed their ratings and price targets for SYSCO (NYSE: SYY):

  • 5/17/2019 – SYSCO was downgraded by analysts at Zacks Investment Research from a “buy” rating to a “hold” rating. According to Zacks, “Sysco has outpaced the industry in the past three months, courtesy of strength of its U.S. Foodservice operations, wherein local case volumes rose for the 20th straight time in third-quarter fiscal 2019. The company is also gaining from its strategies for 2020, which include enhancing consumers’ experience, optimizing business, stimulating power of its people and achieving operational efficacy. These upsides along with focus on buyouts and cost-containment efforts helped the company deliver top and bottom-line growth in the third quarter. Also, these efforts should provide cushion against rising costs and international unit challenges. During the quarter, the U.S. Foodservice unit saw high supply-chain costs across warehouse and transportation. Moreover, the international unit was somewhat dragged by Brexit-related worries and currency woes.”
  • 5/8/2019 – SYSCO had its price target raised by analysts at Loop Capital to $80.00. They now have a “buy” rating on the stock.
  • 5/7/2019 – SYSCO had its “sell” rating reaffirmed by analysts at Pivotal Research. They now have a $58.00 price target on the stock, up previously from $54.00. They wrote, “We think the 3Q19 results reflect a combination of deep cost cutting in Sysco’s U.S. operations, Canada, and Europe and also some degree of financial engineering with respect to expense management. Within Sysco’s international operations, the core operating performance was particularly weak in 3Q. The decrease in revenue and in gross profit are clearly disconnected from the 30% improvement for international based on the adj. operating income growth reported for 3Q. In the U.S. Foodservice operations, the incremental softness in customer traffic (for independents in particular) is also in sharp contrast to the adjusted earnings growth reported in 3Q. We reiterate our SELL rating due to the structural challenges with Brakes, near-term headwinds across Europe, and continued volume pressure with independents in Sysco’s U.S. Foodservice operations.””
  • 5/7/2019 – SYSCO had its price target raised by analysts at Morgan Stanley from $69.00 to $72.00. They now have an “equal weight” rating on the stock.
  • 5/7/2019 – SYSCO was upgraded by analysts at Zacks Investment Research from a “hold” rating to a “buy” rating. They now have a $79.00 price target on the stock. According to Zacks, “Sysco has outpaced the industry in the past three months, courtesy of strength of its U.S. Foodservice operations, wherein local case volumes rose for the 20th straight time in third-quarter fiscal 2019. The company is also gaining from its strategies for 2020, which include enhancing consumers’ experience, optimizing business, stimulating power of its people and achieving operational efficacy. These upsides along with focus on buyouts and cost-containment efforts helped the company deliver top and bottom-line growth in the third quarter. Also, these efforts should provide cushion against rising costs and international unit challenges. During the quarter, the U.S. Foodservice unit saw high supply-chain costs across warehouse and transportation. Moreover, the international unit was somewhat dragged by Brexit-related worries and currency woes.”
  • 5/7/2019 – SYSCO had its price target raised by analysts at Buckingham Research from $82.00 to $84.00. They now have a “buy” rating on the stock.
  • 4/11/2019 – SYSCO was downgraded by analysts at Zacks Investment Research from a “buy” rating to a “hold” rating. According to Zacks, “Sysco’s shares have gained and outpaced the industry in the past three months. The company has been benefitting from strength of its U.S. Foodservice operations, wherein local case volumes have been rising for 19 straight quarters now, with rising restaurant sales remaining a major driver. Apart from this, we also commend Sysco’s focus on its key growth strategies for 2020, which include enhancing consumers’ experience; optimizing business; stimulating power of its people and achieving operational efficacy. These upsides, along with focus on buyouts and cost-containment efforts should provide the company cushion against rising cost woes and a mixed international unit performance. Well, during the second quarter of fiscal 2019, operating expenses in the U.S. Foodservice unit escalated 4.7% on account of increased supply-chain costs across warehouse and transportation. Also, adverse currency translations is a worry.”
  • 3/19/2019 – SYSCO was upgraded by analysts at Zacks Investment Research from a “hold” rating to a “buy” rating. They now have a $74.00 price target on the stock. According to Zacks, “Sysco’s shares have gained and outpaced the industry in the past three months. The company has been benefitting from strength of its U.S. Foodservice operations, wherein local case volumes have been rising for 19 straight quarters now, with rising restaurant sales remaining a major driver. Apart from this, we also commend Sysco’s focus on its key growth strategies for 2020, which include enhancing consumers’ experience; optimizing business; stimulating power of its people and achieving operational efficacy. These upsides, along with focus on buyouts and cost-containment efforts should provide the company cushion against rising cost woes and a mixed international unit performance. Well, during the second quarter of fiscal 2019, operating expenses in the U.S. Foodservice unit escalated 4.7% on account of increased supply-chain costs across warehouse and transportation. Also, adverse currency translations is a worry.”

NYSE:SYY traded up $0.29 during trading hours on Friday, reaching $74.93. 2,493,500 shares of the company were exchanged, compared to its average volume of 2,895,079. The company has a market capitalization of $38.46 billion, a P/E ratio of 23.86, a P/E/G ratio of 2.13 and a beta of 0.55. SYSCO Co. has a 1-year low of $59.44 and a 1-year high of $75.98. The company has a debt-to-equity ratio of 3.44, a current ratio of 1.30 and a quick ratio of 0.79.

SYSCO (NYSE:SYY) last released its earnings results on Monday, May 6th. The company reported $0.79 earnings per share for the quarter, topping the consensus estimate of $0.70 by $0.09. SYSCO had a return on equity of 73.66% and a net margin of 2.65%. The firm had revenue of $14.66 billion during the quarter, compared to analysts’ expectations of $14.78 billion. During the same period in the prior year, the company earned $0.67 earnings per share. The company’s quarterly revenue was up 2.1% on a year-over-year basis. On average, sell-side analysts anticipate that SYSCO Co. will post 3.5 EPS for the current fiscal year.

The firm also recently announced a quarterly dividend, which was paid on Friday, April 26th. Shareholders of record on Friday, April 5th were paid a dividend of $0.39 per share. This represents a $1.56 annualized dividend and a yield of 2.08%. The ex-dividend date of this dividend was Thursday, April 4th. SYSCO’s payout ratio is presently 49.68%.

In other SYSCO news, Director Trian Fund Management, L.P. sold 707,000 shares of the company’s stock in a transaction on Wednesday, March 13th. The stock was sold at an average price of $66.30, for a total transaction of $46,874,100.00. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. 7.88% of the stock is owned by corporate insiders.

Hedge funds and other institutional investors have recently added to or reduced their stakes in the business. Vanguard Group Inc lifted its stake in shares of SYSCO by 3.9% in the 3rd quarter. Vanguard Group Inc now owns 41,599,601 shares of the company’s stock valued at $3,047,170,000 after acquiring an additional 1,549,255 shares during the last quarter. BlackRock Inc. lifted its stake in shares of SYSCO by 4.7% in the 4th quarter. BlackRock Inc. now owns 33,625,346 shares of the company’s stock valued at $2,106,966,000 after acquiring an additional 1,502,847 shares during the last quarter. Oregon Public Employees Retirement Fund lifted its stake in shares of SYSCO by 18,997.7% in the 4th quarter. Oregon Public Employees Retirement Fund now owns 9,960,810 shares of the company’s stock valued at $159,000 after acquiring an additional 9,908,653 shares during the last quarter. Parnassus Investments CA lifted its stake in shares of SYSCO by 4.7% in the 1st quarter. Parnassus Investments CA now owns 8,752,593 shares of the company’s stock valued at $584,323,000 after acquiring an additional 393,096 shares during the last quarter. Finally, Janus Henderson Group PLC lifted its stake in shares of SYSCO by 8.7% in the 1st quarter. Janus Henderson Group PLC now owns 7,948,553 shares of the company’s stock valued at $530,645,000 after acquiring an additional 633,041 shares during the last quarter. Hedge funds and other institutional investors own 80.61% of the company’s stock.

Sysco Corporation, through its subsidiaries, markets and distributes a range of food and related products primarily to the foodservice or food-away-from-home industry. It operates through three segments: U.S. Foodservice Operations, International Foodservice Operations, and SYGMA. The company distributes a line of frozen foods, such as meats, seafood, fully prepared entrees, fruits, vegetables, and desserts; a line of canned and dry foods; fresh meats and seafood; dairy products; beverage products; imported specialties; and fresh produce.

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