Sysco Corp. (SYY) Raised to Buy at Zacks Investment Research
Sysco Corp. (NYSE:SYY) was upgraded by Zacks Investment Research from a “hold” rating to a “buy” rating in a research note issued to investors on Thursday. The firm currently has a $60.00 price objective on the stock. Zacks Investment Research’s price target would suggest a potential upside of 12.68% from the company’s previous close.
According to Zacks, “Estimates have been increasing since Sysco reported first-quarter fiscal 2017 results, where earnings exceeded Zacks Consensus Estimate while revenues were in line with the same. The acquisition of Brakes Group and margin improvement probably drove the earnings beat. Sysco sales have been increasing consistently on the back of acquisitions and volume growth. Further, the company’s growth strategy is paying off. Sysco has delivered positive gross margins in the last six consecutive quarters, after declining consistently over the last two fiscal. Activist investor Trian Fund Management also increased its stake in the company, demonstrating its confidence. Moreover, Sysco’s shares have been outperforming the Zacks-categorized industry despite persistent food-cost deflation hurting the overall industry. However, Brexit uncertainties and currency headwinds continue to remain a concern.”
A number of other research analysts have also weighed in on SYY. JPMorgan Chase & Co. reissued a “neutral” rating and issued a $57.00 price objective (up from $55.00) on shares of Sysco Corp. in a report on Tuesday, August 16th. Vetr lowered Sysco Corp. from a “hold” rating to a “sell” rating and set a $50.83 price objective on the stock. in a report on Thursday, August 18th. Argus increased their price objective on Sysco Corp. from $56.00 to $60.00 and gave the company a “buy” rating in a report on Friday, August 19th. Bank of America Corp. set a $54.00 price objective on Sysco Corp. and gave the company a “hold” rating in a report on Saturday, September 17th. Finally, Barclays PLC started coverage on Sysco Corp. in a report on Friday, September 23rd. They issued an “underweight” rating and a $48.00 price objective on the stock. Two equities research analysts have rated the stock with a sell rating, nine have assigned a hold rating and four have issued a buy rating to the company. The company presently has an average rating of “Hold” and an average target price of $53.16.
Sysco Corp. (NYSE:SYY) opened at 53.25 on Thursday. The stock has a market capitalization of $29.12 billion, a PE ratio of 29.45 and a beta of 0.49. The company has a 50-day moving average price of $50.35 and a 200-day moving average price of $50.46. Sysco Corp. has a 12-month low of $38.84 and a 12-month high of $54.66.
Sysco Corp. (NYSE:SYY) last announced its quarterly earnings data on Monday, November 7th. The company reported $0.67 earnings per share for the quarter, beating analysts’ consensus estimates of $0.58 by $0.09. The business had revenue of $14 billion for the quarter, compared to analyst estimates of $13.88 billion. Sysco Corp. had a return on equity of 35.49% and a net margin of 1.99%. The company’s revenue was up 11.2% on a year-over-year basis. During the same period in the prior year, the company earned $0.52 earnings per share. Analysts expect that Sysco Corp. will post $2.43 earnings per share for the current fiscal year.
The firm also recently declared a quarterly dividend, which will be paid on Friday, January 27th. Shareholders of record on Friday, January 6th will be given a dividend of $0.33 per share. The ex-dividend date is Wednesday, January 4th. This represents a $1.32 dividend on an annualized basis and a yield of 2.48%. This is an increase from Sysco Corp.’s previous quarterly dividend of $0.31. Sysco Corp.’s dividend payout ratio is currently 68.13%.
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In other news, SVP Greg D. Bertrand sold 7,382 shares of the firm’s stock in a transaction that occurred on Tuesday, November 15th. The stock was sold at an average price of $53.50, for a total value of $394,937.00. Following the transaction, the senior vice president now owns 38,272 shares in the company, valued at $2,047,552. The transaction was disclosed in a document filed with the SEC, which is accessible through this hyperlink. Also, CFO Joel T. Grade sold 16,338 shares of the firm’s stock in a transaction that occurred on Monday, November 14th. The shares were sold at an average price of $53.49, for a total value of $873,919.62. Following the completion of the transaction, the chief financial officer now owns 61,563 shares in the company, valued at approximately $3,293,004.87. The disclosure for this sale can be found here. 8.81% of the stock is owned by insiders.
Institutional investors have recently added to or reduced their stakes in the stock. Trian Fund Management L.P. increased its position in Sysco Corp. by 1.6% in the second quarter. Trian Fund Management L.P. now owns 43,965,695 shares of the company’s stock valued at $2,230,819,000 after buying an additional 693,744 shares during the period. Vanguard Group Inc. increased its position in Sysco Corp. by 3.6% in the second quarter. Vanguard Group Inc. now owns 37,790,301 shares of the company’s stock valued at $1,917,480,000 after buying an additional 1,324,659 shares during the period. BlackRock Institutional Trust Company N.A. increased its position in Sysco Corp. by 1.7% in the third quarter. BlackRock Institutional Trust Company N.A. now owns 14,022,199 shares of the company’s stock valued at $687,228,000 after buying an additional 230,698 shares during the period. Wells Fargo & Company MN increased its position in Sysco Corp. by 4.8% in the third quarter. Wells Fargo & Company MN now owns 10,548,954 shares of the company’s stock valued at $517,004,000 after buying an additional 487,395 shares during the period. Finally, BlackRock Fund Advisors increased its position in Sysco Corp. by 2.4% in the third quarter. BlackRock Fund Advisors now owns 9,541,394 shares of the company’s stock valued at $467,624,000 after buying an additional 222,514 shares during the period. Institutional investors and hedge funds own 77.33% of the company’s stock.
About Sysco Corp.
Sysco Corporation (Sysco) along with its subsidiaries and divisions, is a North American distributor of food and related products primarily to the foodservice or food-away-from-home industry. The Company provides products and related services to approximately 425,000 customers, including restaurants, healthcare and educational facilities, lodging establishments and other foodservice customers.
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