Guggenheim upgrades Sysco to Buy on salesforce investment returns

Guggenheim analyst John Heinbockel upgraded Sysco to Buy from Neutral with an $85 price target, which implies a 17% return, including the dividend. Sysco is making investments in its salesforce to leverage its “unique capabilities” in specialty categories and Own Brands to drive profitable share gains in a challenging macro backdrop, the analyst tells investors in a research note. The firm says the stock’s stagnancy over the past six years has lowered Sysco’s EBITDA multiple to 11-time, setting the stage for modest multiple expansion if its operating momentum strengthens over the next 12-18 months as the salesforce investment generates a return.