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Research Alert: CFRA Maintains Hold Opinion On Shares Of Sysco Corporation
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Research Alert: CFRA Maintains Hold Opinion On Shares Of Sysco Corporation
May 1, 2024 11:01 AM

01:40 PM EDT, 05/01/2024 (MT Newswires) -- CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

We lower our 12-month target to $77 from $85 on an FY 25 (Jun.) EV/EBITDA multiple of 11.5x vs. the historical trading range of 13x-14x, reflecting a tougher macro backdrop. We maintain our FY 24 EPS at $4.32, but lower our FY 25 EPS to $4.68 from $4.73. SYY posted Mar-Q adj-EPS of $0.96, in line with consensus. Revenue of $19,380M (+2.7% Y/Y) was $102M below consensus. Adj-operating income increased 8.4% Y/Y to $799M, with margin widening 30 bps Y/Y to 4.1%, in line with consensus. SYY struggled amid the lower costumer traffic environment, with its QSR segment hardest hit. As a result, SYY now expects share gains as recent modifications to its sales force take effect. We also note SYY plans to add $20M in cost-outs, expand supply chain capacity, enhance customer-facing technology, and reduce staff in slower growth areas. Nonetheless, despite our optimism about SYY's initiatives and the international top-line growth, we'd prefer to remain cautious as SYY over indexes to the QSR segment relative to many peers.

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