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 $37.7 billion by market cap, the company also distributes personal care guest amenities, housekeeping supplies, room accessories, and textiles to the lodging industry.
Shares of this food service giant have underperformed the broader market considerably over the past year. SYY has gained 8.7% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 32.3%. In 2024, SYY’s stock rose 2.5%, compared to the SPX’s 24.7% rise on a YTD basis.
Narrowing the focus, SYY’s underperformance looks less pronounced compared to the iShares US Consumer Staples ETF (IYK). The exchange-traded fund has gained about 9.5% over the past year. Moreover, the ETF’s 7.3% gains on a YTD basis outshine the stock’s returns over the same time frame.
On Oct. 29, SYY shares closed down more than 1% after reporting its Q1 results. Its adjusted EPS of $1.09 did not meet Wall Street expectations of $1.13. The company’s revenue was $20.48 billion, beating Wall Street forecasts of $20.45 billion.
For the current fiscal year, ending in June 2025, analysts expect SYY’s EPS to grow 6% to $4.57 on a diluted basis. The company’s earnings surprise history is mixed. It beat the consensus estimate in three of the last four quarters while missing the forecast on another occasion.
Among the 16 analysts covering SYY stock, the consensus is a “Moderate Buy.” That’s based on 11 “Strong Buy” ratings, and five “Holds.”
The configuration has been consistent over the past three months.
On Nov. 4, JPMorgan Chase & Co. (JPM) analyst John Ivankoe maintained a “Buy” rating on Sysco with a price target of $86, implying a potential upside of 14.7% from current levels.
The mean price target of $85.08 represents a 13.5% premium to SYY’s current price levels. The Street-high price target of $92 suggests an upside potential of 22.7%.
