Sysco (SYY) shares jumped 6.52% after the company delivered robust fiscal Q4 results ended July 3, 2021. The company raised its guidance for Fiscal 2022. The better-than-expected results came on the back of strong market share gains and strong industry demand. The company’s cash flow position also strengthened despite increased inventory investments.
Sales were stronger than expected, increasing 82% year-over-year to $16.1 billion and beating consensus estimates of $14.23 billion. However, Fiscal 2021 revenue was down 3% year-over-year to $51.3 billion. (See Sysco stock charts on TipRanks)
Sysco posted earnings of $0.71 a share compared to a loss of $0.29 a share delivered in the same quarter last year. Analysts were expecting earnings of $0.60 a share for fiscal Q4.
EPS decreased to $1.44 for Fiscal 2021 compared to earnings of $2.01 a share generated in fiscal 2020.
Sysco CFO Aaron Alt stated, “Strong sales that surpassed 2019 levels, combined with solid management of inflation and cost, are underpinning our confidence to raise our EPS guidance for fiscal year 2022 to $3.33 to $3.53.”
On July 29, UBS analyst Mark Carden initiated coverage on the stock with a Buy rating and a price target of $89, implying 13.75% upside potential to current levels.
According to the analyst, Sysco boasts a strong balance sheet, ideal for offsetting COVID-related stresses. Additionally, strategic initiatives position the company to accrue substantial market share post-pandemic.
Consensus among analysts is a Moderate Buy based on 3 Buys and 2 Holds. The average Sysco price target of $88.75 implies 13.43% upside potential to current levels.
SYY scores a 7 out of 10 on TipRanks’ Smart Score rating system, suggesting that the stock is likely to perform in line with market averages.
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