Sysco (SYY) AI Stock Analysis

• Market Cap: $34.77B
• Dividend Yield: 2.98%
• Average Volume (3M): 3.66M
• Price to Earnings (P/E): 18.3
• Beta (1Y): 0.29
• Revenue Growth: 3.95%
• EPS Growth: -5.04%
• Country: US
• Employees: 76,000
• Sector: Consumer Defensive
• Sector Strength: 86
• Industry: Food Distribution
• EPS (TTM): 3.89
• Shares Outstanding: 489,229,640
• 10 Day Avg. Volume: 3,606,393
• 30 Day Avg. Volume: 3,664,537
• PEG Ratio: 2.05
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.43
• Price to Cash Flow (P/CF): 19.50
• P/FCF Ratio: 19.50
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $85.00
• Price Target Upside: 19.60% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10

Sysco's overall score reflects robust financial performance and a solid earnings outlook, supported by effective cost management and expanding international operations. While technical indicators suggest some caution, the company's reasonable valuation and shareholder return strategies enhance its attractiveness. Key risks include high leverage and potential cash flow declines, but these are offset by strong profitability.

Positive Factors

Market share and growth potential

SYY is rated Outperform as its initiatives and salesforce investment could drive market share gains and stronger local growth.

Salesforce productivity

Salesforce issue bottoming with expected productivity recapture and resumption of sales rep growth should yield better local case growth.

Strategic cost savings

Strategic sourcing, supply chain, and organizational optimization contribute to a $100 million+ savings target.

Negative Factors

Case growth challenges

Case growth metrics haven't really made progress.

Local case volume

Local case volume growth continued to lag.

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 Business Overview & Revenue Model

Company Description

Sysco Corporation, through its subsidiaries, engages in the marketing and distribution of various food and related products primarily to the foodservice or food-away-from-home industry in the United States, Canada, the United Kingdom, France, and internationally. It operates through U.S. Foodservice Operations, International Foodservice Operations, SYGMA, and Other segments. The company distributes frozen foods, such as meats, seafood, fully prepared entrées, fruits, vegetables, and desserts; canned and dry foods; fresh meats and seafood; dairy products; beverage products; imported specialties; and fresh produce. It also supplies various non-food items, including paper products comprising disposable napkins, plates, and cups; tableware consisting of China and silverware; cookware, which include pots, pans, and utensils; restaurant and kitchen equipment and supplies; and cleaning supplies. The company serves restaurants, hospitals and nursing homes, schools and colleges, hotels and motels, industrial caterers, and other foodservice venues. As of August 27, 2021, it operated 343 distribution facilities. Sysco Corporation was incorporated in 1969 and is headquartered in Houston, Texas.

How the Company Makes Money

Sysco 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 solid revenue growth and efficient cost management, leading to healthy margins. While high leverage is a potential risk, strong profitability metrics and robust cash flow generation offer a counterbalance. However, the decline in free cash flow growth should be monitored.

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.

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.

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.

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
652.79M	696.00M	745.20M	867.09M	3.01B	6.06B
	Total Assets
10.47B	24.92B	22.82B	22.13B	21.41B	22.63B
	Total Debt
2.48B	12.95B	11.17B	11.39B	11.82B	15.08B
	Net Debt
1.82B	12.25B	10.42B	10.52B	8.81B	9.02B
	Total Liabilities
6.44B	23.03B	20.78B	20.71B	19.83B	21.44B
	Stockholders Equity
4.03B	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

• Technical Analysis Sentiment: Negative
• Last Price: 71.07
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SYY, the sentiment is Negative. The current price of 71.07 is below the 20-day moving average (MA) of 72.28, below the 50-day MA of 72.40, and below the 200-day MA of 73.86, indicating a bearish trend. The MACD of -0.05 indicates Negative momentum. The RSI at 56.94 is Neutral, neither overbought nor oversold. The STOCH value of 84.95 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SYY.

Sysco Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
USFD	79 Outperform	$13.93B	30.01	10.65%	―	6.41%	-2.01%
SYY	74 Outperform	$34.77B	18.26	87.49%	2.98%	3.95%	-5.04%
CHEF	71 Outperform	$2.15B	40.43	11.18%	―	10.50%	59.18%
PFGC	71 Outperform	$12.20B	31.47	9.54%	―	3.85%	-9.74%
SPTN	63 Neutral	$649.85M	2,206.90	0.04%	4.62%	-2.66%	8.18%
Sector *	62 Neutral	$20.34B	13.97	-16.14%	3.32%	1.30%	5.01%
GFS	54 Neutral	$20.00B	28.15	-2.42%	―	-8.69%	-125.98%