Sysco (SYY) Downgraded to Sell at Zacks Investment Research

Sysco (NYSE:SYY) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a research note issued on Thursday.

According to Zacks, “Sysco has been gaining from its solid brand portfolio, digital initiatives and focus on buyouts. Also, the company is on track with its cost-savings plan and key goals for 2020. Such endeavors helped Sysco retain its stellar record in second-quarter fiscal 2018, wherein both the top and bottom line grew year over year and topped estimates. However, Sysco’s European business continued to struggle due to higher costs related to transformation efforts. Also, the company continues to bear the brunt of higher inbound freight costs, stemming from driver availability challenges in the industry. Moreover, Sysco’s international segment performance remain challenged with cost inflation in the U.K., driven by higher product costs and currency movements. These headwinds have been weighing on Sysco’s shares, that have gone down 2.2% in the past three months, while it compares favorably with the industry's decline of 9.9%.”

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Other equities analysts have also recently issued research reports about the stock. Bank of America upped their price target on shares of Sysco from $68.00 to $70.00 and gave the stock a “buy” rating in a research note on Tuesday, February 6th. Loop Capital dropped their price target on shares of Sysco from $72.00 to $70.00 and set a “buy” rating on the stock in a research note on Tuesday, February 6th. Pivotal Research lowered their target price on shares of Sysco from $68.00 to $61.00 and set a “buy” rating on the stock in a research note on Tuesday, February 6th. BMO Capital Markets set a $74.00 target price on shares of Sysco and gave the company a “buy” rating in a research note on Monday, February 5th. Finally, Morgan Stanley upgraded shares of Sysco from an “underweight” rating to an “equal weight” rating and set a $64.00 target price on the stock in a research note on Tuesday, January 16th. One analyst has rated the stock with a sell rating, six have issued a hold rating and six have issued a buy rating to the stock. The company currently has an average rating of “Hold” and a consensus target price of $65.00.

Shares of Sysco stock opened at $60.42 on Thursday. The stock has a market capitalization of $31,586.52, a P/E ratio of 24.36, a PEG ratio of 2.05 and a beta of 0.55. Sysco has a 1 year low of $48.85 and a 1 year high of $64.27. The company has a current ratio of 1.38, a quick ratio of 0.85 and a debt-to-equity ratio of 3.66.

Sysco (NYSE:SYY) last announced its quarterly earnings results on Monday, February 5th. The company reported $0.66 earnings per share (EPS) for the quarter, topping the Zacks’ consensus estimate of $0.65 by $0.01. The company had revenue of $14.41 billion for the quarter, compared to analysts’ expectations of $14.15 billion. Sysco had a net margin of 2.10% and a return on equity of 61.02%. Sysco’s revenue was up 7.1% compared to the same quarter last year. During the same quarter in the previous year, the business posted $0.58 EPS. analysts expect that Sysco will post 2.93 earnings per share for the current fiscal year.

In other news, EVP Wayne Shurts sold 7,800 shares of the stock in a transaction that occurred on Thursday, February 22nd. The shares were sold at an average price of $58.98, for a total value of $460,044.00. Following the transaction, the executive vice president now owns 55,235 shares in the company, valued at approximately $3,257,760.30. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available through the SEC website. Also, SVP William W. Goetz sold 11,323 shares of the stock in a transaction that occurred on Tuesday, January 16th. The stock was sold at an average price of $62.00, for a total transaction of $702,026.00. Following the completion of the transaction, the senior vice president now owns 35,825 shares in the company, valued at approximately $2,221,150. The disclosure for this sale can be found here. Insiders have sold a total of 54,732 shares of company stock worth $3,321,174 in the last 90 days. Company insiders own 9.60% of the company’s stock.

Several large investors have recently modified their holdings of SYY. Valeo Financial Advisors LLC lifted its stake in shares of Sysco by 98.7% in the 4th quarter. Valeo Financial Advisors LLC now owns 2,267 shares of the company’s stock worth $138,000 after purchasing an additional 1,126 shares during the period. Trustcore Financial Services LLC bought a new position in shares of Sysco in the 4th quarter worth approximately $194,000. Premia Global Advisors LLC bought a new position in shares of Sysco in the 4th quarter worth approximately $195,000. Scott & Selber Inc. bought a new position in shares of Sysco in the 4th quarter worth approximately $200,000. Finally, McKinley Carter Wealth Services Inc. bought a new position in shares of Sysco in the 4th quarter worth approximately $202,000. Hedge funds and other institutional investors own 79.03% of the company’s stock.

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Sysco Company Profile

Sysco Corporation, through its subsidiaries, markets and distributes a range of food and related products primarily to the foodservice or food-away-from-home industry in the United States, Canada, Bahamas, Mexico, Costa Rica, Panama, the United Kingdom, France, Sweden, Ireland, Belgium, Spain, and Luxembourg.

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