Sysco Corporation Faces Challenges as Stock Performance Trails Market Gains
Sysco Corporation (SYY), based in Houston, Texas, supplies a variety of food products and related goods to the foodservice industry, as well as personal care items and linens to hotels. Valued at $37.7 billion, it plays a significant role in the food-at-home market.
Stock Struggles Compared to Market Peers
Over the past year, Sysco’s stock has lagged behind the broader market. While SYY shares increased by 8.7%, the S&P 500 Index ($SPX) saw a robust rise of nearly 32.3%. In the current year, SYY’s stock has only grown by 2.5%, significantly lower than the SPX’s impressive 24.7% gain.
Comparison with Consumer Staples ETF
When looking closely, SYY’s performance aligns more closely with the iShares US Consumer Staples ETF (IYK), which increased by about 9.5% this past year. However, the ETF’s year-to-date gains of 7.3% still surpass SYY’s results.
Q1 Earnings Result Mixed Review
On October 29, SYY shares dropped over 1% following the release of its Q1 earnings. The adjusted earnings per share (EPS) was $1.09, falling short of the expected $1.13. However, the company reported revenue of $20.48 billion, which exceeded the forecast of $20.45 billion.
Analysts Expect Modest Growth
For the current fiscal year ending in June 2025, analysts project SYY’s EPS to grow by 6% to $4.57 on a diluted basis. Historically, Sysco has had a mixed track record, hitting the consensus estimate three out of the last four quarters and missing once.
Analyst Ratings Indicate Cautious Optimism
A survey of 16 analysts covering SYY suggests a “Moderate Buy” consensus, comprised of 11 “Strong Buy” ratings and five “Holds.” Notably, this assessment has remained steady over the past three months.
Future Outlook and Price Targets
On November 4, John Ivankoe from JPMorgan Chase & Co. reiterated a “Buy” rating on Sysco, targeting a price of $86, suggesting a potential upside of 14.7% from its current value. The average price target of $85.08 indicates a 13.5% premium, while the highest target at $92 implies room for a 22.7% increase.
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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
