Sysco (NYSE:SYY) Sees Strong Trading Volume – Still a Buy?

Sysco Corporation (NYSE:SYY) shares saw unusually-high trading volume on Tuesday . 2,434,034 shares changed hands during trading, a decline of 39% from the previous session’s volume of 3,975,683 shares.The stock last traded at $81.5880 and had previously closed at $83.54.

Key Stories Impacting Sysco

Here are the key news stories impacting Sysco this week:

• Positive Sentiment: The offering is intended to support Sysco’s acquisition of Jetro Restaurant Depot, a strategic expansion that could broaden Sysco’s distribution network and strengthen its position in foodservice distribution. Sysco launches $1bn share sale to help fund Jetro deal
• Neutral Sentiment: Sysco priced the public offering at $81 per share, selling 12,345,679 shares for expected gross proceeds of approximately $1 billion. The transaction is scheduled to close on September 16, subject to customary conditions. Sysco Announces Pricing of Common Stock Offering
• Neutral Sentiment: The equity raise advances the financing plan for the Jetro Restaurant Depot merger, following Sysco’s previously announced agreement with Jetro-related entities and ongoing merger disclosure process. Sysco Advances Jetro Restaurant Depot Merger Disclosure Process
• Negative Sentiment: Issuing more shares will dilute existing shareholders’ ownership and per-share exposure to future earnings. That dilution, along with uncertainty over the cost, integration and benefits of the Jetro transaction, is driving the negative near-term reaction in SYY shares. Sysco Stock Slides on $1 Billion Offering

Analysts Set New Price Targets

Several equities analysts have issued reports on SYY shares. UBS Group raised their price objective on Sysco from $90.00 to $95.00 and gave the stock a “buy” rating in a report on Wednesday, August 5th. Weiss Ratings raised Sysco from a “buy (b-)” rating to a “buy (b)” rating in a report on Thursday. Piper Sandler upped their target price on Sysco from $77.00 to $84.00 and gave the company a “neutral” rating in a research report on Wednesday, August 5th. Citigroup raised their price target on Sysco from $82.00 to $86.00 and gave the stock a “neutral” rating in a research note on Wednesday, August 5th. Finally, Melius Research lowered Sysco from a “hold” rating to a “sell” rating in a research report on Tuesday, July 7th. Nine research analysts have rated the stock with a Buy rating, six have assigned a Hold rating and one has given a Sell rating to the company. Based on data from MarketBeat.com, the company presently has a consensus rating of “Moderate Buy” and an average target price of $89.50.

Sysco Price Performance

The company has a 50-day moving average of $82.86 and a 200-day moving average of $79.93. The company has a debt-to-equity ratio of 4.62, a quick ratio of 0.77 and a current ratio of 1.28. The stock has a market cap of $38.56 billion, a price-to-earnings ratio of 22.02, a PEG ratio of 2.86 and a beta of 0.63.

Sysco (NYSE:SYY) last announced its earnings results on Tuesday, August 4th. The company reported $1.53 earnings per share for the quarter, beating the consensus estimate of $1.51 by $0.02. The company had revenue of $22.12 billion for the quarter, compared to the consensus estimate of $21.95 billion. Sysco had a return on equity of 95.05% and a net margin of 2.08%.The company’s revenue was up 4.7% on a year-over-year basis. During the same period last year, the business posted $1.48 EPS. Sysco has set its FY 2027 guidance at 5.025-5.117 EPS and its Q1 2027 guidance at 1.180-1.200 EPS. As a group, equities research analysts predict that Sysco Corporation will post 5.08 earnings per share for the current year.

Sysco Dividend Announcement

The company also recently disclosed a quarterly dividend, which will be paid on Friday, October 23rd. Investors of record on Friday, October 2nd will be given a $0.55 dividend. This represents a $2.20 dividend on an annualized basis and a yield of 2.7%. The ex-dividend date is Friday, October 2nd. Sysco’s dividend payout ratio (DPR) is 60.11%.

Insider Transactions at Sysco

In other Sysco news, EVP Ronald Phillips sold 7,350 shares of the company’s stock in a transaction on Friday, August 21st. The shares were sold at an average price of $83.61, for a total transaction of $614,533.50. Following the completion of the transaction, the executive vice president owned 38,650 shares in the company, valued at approximately $3,231,526.50. This represents a 15.98% decrease in their position. The sale was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Over the last 90 days, insiders have sold 14,508 shares of company stock valued at $1,215,250. Insiders own 0.56% of the company’s stock.

Institutional Inflows and Outflows

A number of institutional investors and hedge funds have recently made changes to their positions in the company. Cary Street Partners Investment Advisory LLC increased its position in Sysco by 11.1% during the 4th quarter. Cary Street Partners Investment Advisory LLC now owns 1,469 shares of the company’s stock worth $108,000 after purchasing an additional 147 shares during the period. Parkside Financial Bank & Trust lifted its holdings in shares of Sysco by 7.0% in the 2nd quarter. Parkside Financial Bank & Trust now owns 2,241 shares of the company’s stock valued at $187,000 after buying an additional 147 shares during the period. EagleClaw Capital Managment LLC lifted its holdings in shares of Sysco by 0.3% in the 4th quarter. EagleClaw Capital Managment LLC now owns 44,485 shares of the company’s stock valued at $3,278,000 after buying an additional 150 shares during the period. Plimoth Trust Co. LLC boosted its stake in shares of Sysco by 4.2% in the first quarter. Plimoth Trust Co. LLC now owns 3,744 shares of the company’s stock valued at $267,000 after buying an additional 150 shares in the last quarter. Finally, Park National Corp OH grew its holdings in Sysco by 1.8% during the first quarter. Park National Corp OH now owns 9,102 shares of the company’s stock worth $649,000 after acquiring an additional 163 shares during the period. 83.41% of the stock is currently owned by institutional investors and hedge funds.

About Sysco

Sysco Corporation (NYSE:SYY) is a global foodservice distributor that supplies restaurants, health care and educational institutions, hospitality businesses, government facilities, and other customers. Its product portfolio includes fresh and frozen foods, meat and seafood, dairy products, produce, pantry staples, beverages, and specialty items, along with nonfood products such as kitchen equipment, cleaning supplies, and disposable serving products.

In addition to distribution, Sysco provides services designed to support foodservice operators, including menu planning, culinary consulting, merchandising assistance, supply-chain solutions, and business-management resources.