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Investing.com - Guggenheim raised its price target on Sysco (NYSE:SYY) to $87.00 from $85.00 on Wednesday, while maintaining a Buy rating on the prominent player in Consumer Staples Distribution. According to InvestingPro, Sysco maintains a "GOOD" financial health score and currently trades near its 52-week high of $82.23.
The price target increase reflects Guggenheim’s confidence in Sysco’s operational initiatives designed to drive an inflection in operating momentum, with local case growth improvement identified as the single most important strategic priority. The company’s solid fundamentals are evidenced by its $81.37 billion in revenue and healthy 18.4% gross profit margin over the last twelve months.
Guggenheim highlighted several factors supporting its outlook, including a healthier and more effective sales force characterized by stable account wins and normalizing losses, rising wallet penetration from efforts such as Perks 2.0, and the resumption of consistent U.S. gross margin expansion powered by favorable mix shifts.
The firm believes these improvements will result in stronger sales and EBIT growth, especially in Sysco’s flagship U.S. segment, and expects such progress will be rewarded with multiple expansion, even if modest and unsustainable.
Sysco shares currently trade at 10.7x Guggenheim’s 2026 estimated EBITDA, with the firm projecting a potential total shareholder return of 12%.
In other recent news, Sysco Corporation reported its fourth-quarter 2025 earnings, surpassing Wall Street expectations. The company achieved an adjusted earnings per share of $1.48, exceeding the projected $1.39, and reported revenue of $21.14 billion, which also topped the anticipated $21 billion. Despite these strong results, Sysco’s initial fiscal 2026 guidance was below consensus, affecting investor sentiment. Guggenheim raised its price target for Sysco to $85, citing a broad-based earnings beat. Truist Securities also increased its price target to $90, highlighting better-than-expected sales and adjusted EBITDA performance. UBS adjusted its price target slightly down to $90, noting that one-time issues impacted the guidance. Barclays (LON:BARC) raised its target to $82, acknowledging improved U.S. local case growth and earnings per share. These developments reflect varied analyst perspectives on Sysco’s recent performance and future prospects.
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