Sysco stock price target lowered to $90 by UBS on one-time issues

Investing.com - UBS lowered its price target on Sysco (NYSE:SYY) to $90.00 from $91.00 on Wednesday, while maintaining a Buy rating on the foodservice distribution company. The $38 billion market cap company, which generates over $80 billion in annual revenue, remains a prominent player in the Consumer Staples Distribution sector.

The price target adjustment follows Sysco’s fourth-quarter results, which showed signs of progress despite a post-earnings share price pullback. UBS noted that while Sysco’s top and bottom line guidance initially underwhelmed investors, the figures were largely affected by one-time issues.

These temporary factors include a 50 basis point sales pressure from Sysco’s Mexico joint venture exit and $0.16 of earnings per share pressure related to normalized incentive compensation. Excluding these items, Sysco’s underlying outlook implies 2.5%-4.5% sales growth and 5%-7% EPS growth, which UBS considers reasonable in a steady macro environment.

UBS highlighted that Sysco’s U.S. local case volume continues to improve, showing a 200 basis point sequential improvement relative to the third quarter. The volume sequentially improved in each month of the fourth quarter, with momentum carrying into July.

The firm expects Sysco to return to positive local case volume growth for fiscal year 2026, particularly as the company moves past its sales force compensation changes and its larger 2024 sales cohort enters what UBS describes as the "12-18 month productivity sweet spot."

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 forecasted $1.39. Additionally, Sysco’s revenue came in at $21.14 billion, surpassing the anticipated $21 billion. Following these results, Barclays (LON:BARC) raised its price target on Sysco’s stock to $82, up from $77, while maintaining an Overweight rating. This decision was influenced by improved U.S. local case growth and earnings per share that outperformed Street expectations. Despite these positive developments, investor concerns over broader market trends were evident, as reflected in the stock’s pre-market trading. These recent developments highlight the company’s strong financial performance in the face of market uncertainties.

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