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Investing.com - Bernstein has initiated coverage on Sysco (NYSE:SYY), a prominent player in the Consumer Staples Distribution industry with a $37.9 billion market cap, setting a Market Perform rating and a price target of $83.00. According to InvestingPro analysis, the company maintains a GOOD financial health score, suggesting solid operational stability.
The research firm describes Sysco as a "stabilizing business" and expects revenue to grow at 4%, aligning with consensus estimates, though growth is anticipated to be more concentrated in international markets and chain businesses. This projection builds upon Sysco’s current revenue growth of 3.2% and its impressive $81.4 billion in trailing twelve-month revenue. InvestingPro data reveals additional insights about Sysco’s strong market position, with more than 8 exclusive ProTips available to subscribers.
Bernstein projects a longer recovery period for independent case volume growth, despite noting encouraging recent trends in this segment.
The firm believes Sysco’s scale and go-to-market approach provide superior margins and diversification, while simultaneously moderating its growth potential.
As Bernstein expects Sysco’s lower-margin businesses to outpace growth in independent restaurants, it models EBITDA to grow by 3% over the next twelve months with limited multiple expansion to 11.5x.
In other recent news, Sysco Corporation has entered into a new credit agreement with Bank of America and a group of lenders, maintaining a $3 billion commitment with an option to increase it to $4 billion. This agreement, effective September 5, 2030, replaces its previous senior revolving credit facility and includes standard covenants and conditions. Additionally, Sysco announced a regular quarterly cash dividend of $0.54 per share, payable on October 24, 2025, to shareholders of record as of October 3, 2025.
Guggenheim has twice raised its price target for Sysco, first to $87 and then to $89, citing operational momentum and local case growth improvement as key factors. Despite these positive indicators, Moody’s Ratings recently changed Sysco’s outlook to negative from stable, pointing to weakened credit metrics, including an increase in debt/EBITDA and a decline in EBITA/interest expense ratios. These developments highlight the mixed signals investors are receiving about Sysco’s financial health and strategic initiatives.
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