UBS cuts Sysco price target to $83, maintains Buy rating

On Wednesday, UBS analyst Mark Carden adjusted the price target for Sysco (NYSE:SYY) shares, reducing it to $83.00 from the previous $86.00, while continuing to recommend a Buy rating for the stock. Currently trading at $71, Sysco’s shares sit near their 52-week low, with analyst targets ranging from $72 to $88. Carden’s assessment comes in the wake of Sysco’s third-quarter results, which did not meet the food distributor’s initial top and bottom line guidance expectations, reflecting broader industry challenges in a softer macroeconomic environment. According to InvestingPro data, seven analysts have recently revised their earnings expectations downward for the upcoming period.

Sysco’s third-quarter performance indicated a more significant decline in local case volumes than in the previous quarter, with a 3.5% decrease compared to a 1.9% decline in the second quarter, excluding the impact from Edward Don. Despite this, Sysco’s market performance appeared to align with the overall industry trend, suggesting that the company has halted its market share losses. The $34.38 billion market cap company maintained revenue growth of 3.55% over the last twelve months, demonstrating resilience in challenging conditions.

Carden noted that Sysco has observed some positive signs, with April showing stronger trends compared to March and the third quarter. Additionally, the company has successfully stabilized its salesforce retention. In response to the current economic climate, Sysco has decided to postpone its forecast for a meaningful rise in local case volume growth until the fiscal year 2026, providing a buffer as it deals with the unpredictable macroeconomic conditions.

The analyst highlighted that while Sysco can manage internal factors, external elements such as consumer confidence and its influence on Food Away From Home expenditure will likely draw significant attention. Despite these challenges, Carden believes that Sysco’s attainable guidance and relatively defensive market position make it an appealing investment at its current valuation. The stock currently offers a 3.08% dividend yield and trades at a P/E ratio of 18.26. InvestingPro analysis suggests the stock is currently undervalued, with additional insights available in the comprehensive Pro Research Report, which provides deep-dive analysis of this prominent consumer staples distributor.

In other recent news, Sysco Corporation reported its Q3 2025 earnings, falling short of both earnings per share (EPS) and revenue expectations. The company announced an EPS of $0.96, missing the anticipated $1.03, and revenue of $19.6 billion, which was below the forecasted $20.12 billion. Despite these challenges, Sysco’s international segment showed resilience with a local volume increase of 4.5%. The company has revised its full-year net sales growth guidance to approximately 3%, down from the previous 4-5% range. Sysco also expects full-year adjusted EPS growth of at least 1% and anticipates Q4 adjusted EPS to be at least flat. Analysts have expressed concerns about Sysco’s sales force productivity and customer retention strategies, given the elevated industry churn. The company is focusing on initiatives to enhance pricing transparency and retention efforts to address these issues. Additionally, Sysco has announced a cash and carry pilot program in Houston, aiming to tap into the fast-growing segment of the food away from home market.

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