In a report released today, Ajay Jain from Pivotal Research reiterated a Sell rating on Sysco Corp (SYY), with a price target of $54. The company’s shares closed yesterday at $66.64.
Jain commented:
“We reiterate our SELL rating. Cost cutting a path towards FY20 growth plan – As it relates to the 2Q19 results, Sysco delivered a margin and tax driven earnings beat with some noticeable softness in U.S. case growth and continued weakness in International operations. All of the operating segments reflect some incremental weakness in 2Q (decelerating case growth in U.S. Foodservice, gross margin pressure in both International and Other segments, general softness in SYGMA, and unfavorable comparisons for the Corporate segment). As mgt. tightens its focus on the three-year growth metrics, the aggressive cost cutting does not come as a surprise. However, the timing is problematic as U.S. case growth continues to soften and the core operating performance of other segments appears to be rapidly deteriorating.”
According to TipRanks.com, Jain is a 4-star analyst with an average return of 12.1% and a 58.3% success rate. Jain covers the Services sector, focusing on stocks such as Walgreens Boots Alliance, Performance Food Group, and US Food Holdings Corp.
The word on The Street in general, suggests a Moderate Buy analyst consensus rating for Sysco Corp with a $69.38 average price target.
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The company has a one-year high of $75.98 and a one-year low of $56.01. Currently, Sysco Corp has an average volume of 3.53M.
Based on the recent corporate insider activity of 137 insiders, corporate insider sentiment is negative on the stock.
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Sysco Corp. engages in selling, marketing, and distribution of food products to restaurants, healthcare and educational facilities, and lodging establishments. It operates through the following segments: U.S. Foodservice Operations, International Foodservice Operations, SYGMA, and Other.
