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Sysco (SYY) Gains But Lags Market: What You Should Know

Sysco (SYY) closed the most recent trading day at $73.76, moving +1.07% from the previous trading session. The stock lagged the S&P 500's daily gain of 1.97%. Elsewhere, the Dow gained 1.88%, while the tech-heavy Nasdaq added 0.25%.

Prior to today's trading, shares of the food distributor had lost 11.65% over the past month. This has lagged the Consumer Staples sector's loss of 8.57% and the S&P 500's loss of 9.93% in that time.

Investors will be hoping for strength from Sysco as it approaches its next earnings release. On that day, Sysco is projected to report earnings of $0.99 per share, which would represent year-over-year growth of 19.28%. Meanwhile, our latest consensus estimate is calling for revenue of $18.61 billion, up 13.06% from the prior-year quarter.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $4.20 per share and revenue of $75.6 billion. These totals would mark changes of +29.23% and +10.15%, respectively, from last year.

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It is also important to note the recent changes to analyst estimates for Sysco. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.08% lower. Sysco is currently a Zacks Rank #3 (Hold).

Looking at its valuation, Sysco is holding a Forward P/E ratio of 17.36. For comparison, its industry has an average Forward P/E of 17.41, which means Sysco is trading at a discount to the group.

Investors should also note that SYY has a PEG ratio of 1.93 right now. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. Food - Miscellaneous stocks are, on average, holding a PEG ratio of 2.55 based on yesterday's closing prices.

The Food - Miscellaneous industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 162, which puts it in the bottom 36% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow SYY in the coming trading sessions, be sure to utilize Zacks.com.


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