Pivotal Research analyst Ajay Jain reiterated a Sell rating on Sysco Corp (SYY) today and set a price target of $58. The company’s shares opened today at $72.83.
Jain wrote:
“We think the 3Q19 results reflect a combination of deep cost cutting in Sysco’s U.S. operations, Canada, and Europe and also some degree of financial engineering with respect to expense management. Within Sysco’s international operations, the core operating performance was particularly weak in 3Q. The decrease in revenue and in gross profit are clearly disconnected from the 30% improvement for international based on the adj. operating income growth reported for 3Q. In the U.S. Foodservice operations, the incremental softness in customer traffic (for independents in particular) is also in sharp contrast to the adjusted earnings growth reported in 3Q. We reiterate our SELL rating due to the structural challenges with Brakes, near-term headwinds across Europe, and continued volume pressure with independents in Sysco’s U.S. Foodservice operations.”
According to TipRanks.com, Jain is a 4-star analyst with an average return of 12.5% and a 58.6% success rate. Jain covers the Services sector, focusing on stocks such as Walgreens Boots Alliance, US Food Holdings Corp, and United Natural Foods.
Currently, the analyst consensus on Sysco Corp is a Moderate Buy with an average price target of $74.40.
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Based on Sysco Corp’s latest earnings release for the quarter ending March 31, the company reported a quarterly net profit of $440 million. In comparison, last year the company had a net profit of $330 million.
Based on the recent corporate insider activity of 120 insiders, corporate insider sentiment is negative on the stock. Most recently, in February 2019, Robert Charlton, the EVP of SYY bought 2,994 shares for a total of $100,000.
TipRanks has tracked 36,000 company insiders and found that a few of them are better than others when it comes to timing their transactions. See which 3 stocks are most likely to make moves following their insider activities.
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.
