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Sysco Corporation (SYY)
:SYY
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Sysco
(NYSE:SYY)75Outperform
Positive Factors
Financial strategy
Sysco has raised its share repurchase outlook, indicating financial strength and confidence in its future performance.
Salesforce productivity
Salesforce issue bottoming with expected productivity recapture and resumption of sales rep growth should yield better local case growth.
Negative Factors
Sales consultant turnover
The disruption from the compensation changes in July 2024 resulted in elevated sales consultant turnover, which has been a consistent headwind.
Sysco (SYY) vs. S&P 500 (SPY)
Market Cap
$36.65B
Dividend Yield2.68%
Average Volume (3M)4.33M
Price to Earnings (P/E)19.2
Beta (1Y)0.36
Revenue Growth3.95%
EPS Growth-5.04%
CountryUS
Employees76,000
SectorConsumer Defensive
Sector Strength73
IndustryRetailers - Staples
Share Statistics
EPS (TTM)3.89
Shares Outstanding489,229,640
10 Day Avg. Volume4,585,164
30 Day Avg. Volume4,331,820
Financial Highlights & Ratios
PEG Ratio2.05
Price to Book (P/B)N/A
Price to Sales (P/S)0.46
Price to Cash Flow (P/CF)20.80
P/FCF Ratio20.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$85.64Price Target Upside14.31% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering11
Sysco Business Overview & Revenue Model
Company DescriptionTexas-based Sysco Corp. markets and distributes a range of food and related products primarily to the foodservice or food-away-from-home industries. It operates through the following segments: US Foodservice Operations, International Foodservice Operations, SYGMA and Other.
How the Company Makes MoneySysco Corporation generates revenue primarily through the sale and distribution of food and related products to a wide array of customers in the foodservice industry. The company's broadline segment, which distributes a wide variety of fresh and frozen foods, as well as non-food products, is a significant contributor to its revenue. Sysco also earns revenue through its SYGMA segment, which provides food and non-food products to chain restaurants in the U.S., and through its International Foodservice Operations, which extends its reach to global markets. The company's earnings are bolstered by its extensive supply chain capabilities, strategic partnerships with suppliers, and its ability to leverage economies of scale to offer competitive pricing and services. Additionally, Sysco's investment in technology and logistics improves its operational efficiency, further enhancing its profitability.
Sysco Financial Statement Overview
Summary
Sysco exhibits strong financial performance with consistent revenue and profit growth, backed by efficient cost management. While the company's high leverage presents a potential risk, it is mitigated by strong profitability metrics. Cash flow generation remains robust, although recent declines in free cash flow warrant monitoring. Overall, Sysco is well-positioned in the Retailers - Staples industry.Income Statement
Sysco has demonstrated strong revenue growth with a TTM revenue of $80.57 billion, up from $78.84 billion in the previous year. The company maintains solid gross and net profit margins at 18.39% and 2.40% respectively, indicating efficient cost management and profitability. The EBIT and EBITDA margins of 4.18% and 5.22% suggest healthy operating performance.85
Very Positive
Balance Sheet
Sysco's balance sheet reflects a high debt-to-equity ratio of 6.80, indicating significant leverage, which poses a potential risk. However, the company's Return on Equity (ROE) of 95.95% is impressive, reflecting strong profitability relative to shareholders' equity. The equity ratio is low at 7.95%, suggesting limited equity financing.70
Positive
Cash Flow
Sysco's cash flow statement shows a robust operating cash flow to net income ratio of 1.44, indicating strong cash generation relative to net income. The free cash flow growth rate is -9.28%, showing a decline from the previous period, which could be a concern. However, the company maintains a healthy free cash flow to net income ratio of 1.01.78
Positive
| Breakdown | |||||
| TTM | Jun 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Jun 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 80.57B | 78.84B | 76.32B | 68.64B | 51.30B | 52.89B | Gross Profit |
| 14.82B | 14.61B | 13.95B | 12.32B | 9.36B | 9.90B | EBIT |
| 3.37B | 3.20B | 3.04B | 2.34B | 1.44B | 749.50M | EBITDA |
| 4.21B | 4.17B | 3.67B | 3.10B | 1.94B | 1.54B | Net Income Common Stockholders |
| 1.93B | 1.96B | 1.77B | 1.36B | 524.21M | 215.47M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 696.00M | 696.00M | 745.20M | 867.09M | 3.01B | 6.06B | Total Assets |
| 24.92B | 24.92B | 22.82B | 22.13B | 21.41B | 22.63B | Total Debt |
| 12.95B | 12.95B | 11.17B | 11.39B | 11.82B | 15.08B | Net Debt |
| 12.25B | 12.25B | 10.42B | 10.52B | 8.81B | 9.02B | Total Liabilities |
| 23.03B | 23.03B | 20.78B | 20.71B | 19.83B | 21.44B | Stockholders Equity |
| 1.86B | 1.86B | 2.01B | 1.38B | 1.55B | 1.16B |
| Cash Flow | Free Cash Flow | ||||
| 1.96B | 2.16B | 2.07B | 1.16B | 1.43B | 898.26M | Operating Cash Flow |
| 2.78B | 2.99B | 2.87B | 1.79B | 1.90B | 1.62B | Investing Cash Flow |
| -661.06M | -1.96B | -784.61M | -1.88B | -428.70M | -756.31M | Financing Cash Flow |
| -2.32B | -1.04B | -2.06B | -1.99B | -4.63B | 4.72B |
Sysco Technical Analysis
Positive
74.92
Price Trends
73.72
Positive
74.86
Positive
74.12
Positive
Market Momentum
0.50
Negative
58.50
Neutral
81.05
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SYY, the sentiment is Positive. The current price of 74.92 is above the 20-day moving average (MA) of 72.37, above the 50-day MA of 73.72, and above the 200-day MA of 74.12, indicating a bullish trend. The MACD of 0.50 indicates Negative momentum. The RSI at 58.50 is Neutral, neither overbought nor oversold. The STOCH value of 81.05 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SYY.
Sysco Risk Analysis
Sysco disclosed 28 risk factors in its most recent earnings report. Sysco reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Sysco Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $16.51B | 34.79 | 10.91% | ― | 6.41% | -2.01% | |
76 Outperform | $12.75B | 32.89 | 9.10% | ― | 3.85% | -9.74% | |
75 Outperform | $36.65B | 19.25 | 95.95% | 2.68% | 3.95% | -5.04% | |
75 Outperform | $2.50B | 47.74 | 10.32% | ― | 10.50% | 59.18% | |
63 Neutral | $20.85B | 13.27 | -10.88% | 7.48% | 1.13% | 11.50% | |
63 Neutral | $681.71M | 2,320.69 | 5.85% | 4.28% | -2.66% | 8.18% | |
54 Neutral | $21.54B | 28.15 | -2.46% | ― | -8.69% | -125.98% |
* Consumer Defensive Sector Average
Performance Comparison
SYY
Sysco
74.92
-2.14
-2.78%
SPTN
SpartanNash Co
19.92
0.82
4.29%
CHEF
The Chefs' Warehouse
62.03
24.37
64.71%
PFGC
Performance Food Group
81.60
4.99
6.51%
USFD
US Foods Holding
68.26
15.66
29.77%
GFS
GlobalFoundries Inc
37.57
-15.00
-28.53%
Sysco Earnings Call Summary
Earnings Call Date: Jan 28, 2025 | % Change Since: -2.52% | Next Earnings Date: May 6, 2025
Earnings Call Sentiment Neutral
Sysco's earnings call revealed solid revenue growth and notable achievements in international expansion and shareholder returns. However, challenges such as local case volume decline and external disruptions like weather and reduced U.S. restaurant traffic present ongoing obstacles. While there is positive momentum, especially in international and SYGMA sales, the balance between highlights and lowlights suggests cautious optimism.Highlights
Revenue Growth
Sysco delivered over $20 billion in total revenue for the quarter, a growth of 4.5% compared to the same quarter in fiscal 2024, driven by U.S. Foodservice volume growth of 1.4% and moderate inflation of 2.1%.
International Segment Performance
The International segment reported adjusted operating income growth of 26.5% and local case growth of 4.7% year-over-year, highlighting strong profit growth and operational improvements.
SYGMA Sales Increase
SYGMA's sales were up 10.6% for the quarter, contributing significantly to Sysco's top-line growth.
Shareholder Returns
Sysco announced an upsizing of its share repurchase plan to $1.25 billion for the fiscal year, with the potential for further increase depending on M&A activity, and plans to distribute $1 billion in dividends.
Lowlights
Local Case Volume Decline
Local case volume decreased by 0.9% in the U.S., with a notable decline excluding the impact of DON business at 1.9%.
Weather Impact
The quarter was negatively impacted by weather disruptions, including hurricanes and holiday shifts that affected the beginning and end of the quarter.
U.S. Restaurant Traffic Decline
Food traffic to restaurants in the U.S. was down approximately 2% for the second quarter.
Company Guidance
During Sysco's second quarter fiscal year 2025 conference call, the company provided guidance on several key metrics, highlighting a positive trajectory for the remainder of the fiscal year. Sysco reported over $20 billion in total revenue, marking a 4.5% increase compared to fiscal 2024, driven by 1.4% growth in U.S. Foodservice volume and a moderate inflation rate of 2.1%. The International segment posted a 26.5% rise in adjusted operating income, supported by a 4.7% increase in local case growth, while SYGMA saw a 10.6% increase in sales. The company achieved an adjusted EPS of $0.93, reflecting a 4.5% growth from the previous year. Sysco anticipates continued improvements in supply chain efficiency and sales force effectiveness, projecting a full-year net sales growth of 4% to 5% and adjusted EPS growth of 6% to 7%. Additionally, Sysco plans to return over $2.25 billion to shareholders through dividends and share repurchases, reinforcing its commitment to shareholder value.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.