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How Is Sysco's Stock Performance Compared to Other Food & Beverage Stocks?

Sysco Corporation (SYY), headquartered in Houston, Texas, markets and distributes a range of food and related products to the foodservice or food-away-from-home industry. Valued at $35.2 billion by market cap, the company also distributes personal care guest amenities, housekeeping supplies, room accessories, and textiles to the lodging industry. 

Companies worth $10 billion or more are generally described as “large-cap stocks,” and Sysco fits well into that category, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the food distribution industry. With an expansive network spanning 340 distribution facilities, it ensures efficient and reliable service to a wide range of customers. The company's emphasis on private brand development, overseen by a skilled quality assurance team, sets Sysco apart by delivering exceptional products that meet rigorous quality standards. 

 

Despite its notable strength, SYY slipped 12% from its 52-week high of $83.47, achieved on Oct. 2. Over the past three months, SYY stock has declined 11%, underperforming the Invesco Food & Beverage ETF’s (PBJ5.3% losses during the same time frame.

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In the longer term, shares of SYY rose marginally on a six-month basis, outperforming PBJ’s six-month losses of 5.6%. However, the stock dipped 8.6% over the past 52 weeks, underperforming PBJ’s 7.9% dip over the last year.

To confirm the bearish trend, SYY has been trading below its 50-day moving average since early October, with minor fluctuations. The stock is trading below its 200-day moving average since late October, with slight fluctuations. 

www.barchart.com

Sysco's underperformance is due to weak demand in its core U.S. foodservice business and cost pressures from food inflation and weather-related supply chain disruptions, which are squeezing margins.

On Oct. 28, SYY shares closed down by 2.7% after reporting its Q1 results. Its adjusted EPS of $1.15 topped Wall Street expectations of $1.12. The company’s revenue was $21.2 billion, beating Wall Street's $21.1 billion forecast.

Sysco’s rival, The Andersons, Inc. (ANDE), has taken the lead over the stock, with 47.1% gains over the past six months and an 8% rise over the past 52 weeks.

Wall Street analysts are reasonably bullish on SYY’s prospects. The stock has a consensus “Moderate Buy” rating from the 16 analysts covering it, and the mean price target of $87.71 suggests a potential upside of 19.4% from current price levels.


On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.

 

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