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Relative to Consumer Staples Sector Median (N=180)
Metric
SYY
Benchmark
P/E Ratio
21.2x
-36%
EV/EBITDA
13.1x
+89%
Price / Book
15.3x
Implied Value Audit
OVERVALUED
Implied Fair Value (vs Sector)
-54.3%
$33.29Spot: $72.82
Spot
Implied
-50% Delta+50% Delta
Relative valuation derived from Consumer Staples sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 50GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
72.5%
Sector: 7.7%
Dividend Analysis audit
INCOME
2.85%
Trailing Yield
$2.85
Per $100 Invested
Solid dividend yield for income-focused strategies.
Est. Payout Ratio
60%MID
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, SYSCO CORP (SYY) receives a "Hold" rating with a composite score of 50.9/100, ranked #1364 out of 4446 stocks. Key factor scores: Quality 50/100, Value 53/100, Momentum 49/100. This is quantitative analysis only — not investment advice.
SYSCO CORP (SYY) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does SYSCO CORP Do?
Sysco Corporation, through its subsidiaries, engages in the marketing and distribution of various food and related products primarily to the foodservice or food-away-from-home industry in the United States, Canada, the United Kingdom, France, and internationally. It operates through U.S. Foodservice Operations, International Foodservice Operations, SYGMA, and Other segments. The company distributes frozen foods, such as meats, seafood, fully prepared entrées, fruits, vegetables, and desserts; canned and dry foods; fresh meats and seafood; dairy products; beverage products; imported specialties; and fresh produce. It also supplies various non-food items, including paper products comprising disposable napkins, plates, and cups; tableware consisting of China and silverware; cookware, which include pots, pans, and utensils; restaurant and kitchen equipment and supplies; and cleaning supplies. The company serves restaurants, hospitals and nursing homes, schools and colleges, hotels and motels, industrial caterers, and other foodservice venues. As of August 27, 2021, it operated 343 distribution facilities. Sysco Corporation was incorporated in 1969 and is headquartered in Houston, Texas. SYSCO CORP (SYY) is classified as a large-cap stock in the Consumer Staples sector, specifically within the Wholesale industry. The company is led by CEO Kevin P. Hourican and employs approximately 71,000 people, headquartered in Houston, Texas. With a market capitalization of $34.5B, SYY is one of the prominent companies in the Consumer Staples sector.
SYSCO CORP (SYY) Stock Rating — Hold (April 2026)
As of April 2026, SYSCO CORP receives a Hold rating with a composite score of 50.9/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.SYY ranks #1,364 out of 4,446 stocks in our coverage universe. Within the Consumer Staples sector, SYSCO CORP ranks #48 of 180 stocks, placing it in the upper half of its Consumer Staples peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
SYY Stock Price and 52-Week Range
SYSCO CORP (SYY) currently trades at $72.82. The stock lost $2.17 (2.9%) in the most recent trading session. The 52-week high for SYY is $91.84, which means the stock is currently trading -20.7% from its annual peak. The 52-week low is $67.12, putting the stock 8.5% above its annual trough. Recent trading volume was 9.9M shares, reflecting moderate market activity.
Is SYY Overvalued or Undervalued? — Valuation Analysis
SYSCO CORP (SYY) carries a value factor score of 53/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The trailing price-to-earnings ratio is 21.16x, compared to the Consumer Staples sector average of 33.11x — a discount of 36%. The price-to-book ratio stands at 15.34x, versus the sector average of 1.74x. The price-to-sales ratio is 0.43x, compared to 0.35x for the average Consumer Staples stock. On an enterprise value basis, SYY trades at 13.13x EV/EBITDA, versus 6.93x for the sector.
Overall, SYY's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
SYSCO CORP Profitability — ROE, Margins, and Quality Score
SYSCO CORP (SYY) earns a quality factor score of 50/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 72.5%, compared to the Consumer Staples sector average of 7.7%, which demonstrates strong shareholder value creation. Return on assets (ROA) comes in at 6.1% versus the sector average of 3.1%.
On a margin basis, SYSCO CORP reports gross margins of 18.3%, compared to 26.2% for the sector. The operating margin is 3.5% (sector: 2.9%). Net profit margin stands at 2.0%, versus 1.6% for the average Consumer Staples stock. Revenue growth is running at 1.4% on a trailing basis, compared to 3.1% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
SYY Debt, Balance Sheet, and Financial Health
SYSCO CORP has a debt-to-equity ratio of 595.0%, compared to the Consumer Staples sector average of 72.0%. This elevated leverage warrants close monitoring, as it increases the company's sensitivity to rising interest rates and economic downturns. Total debt on the balance sheet is $13.59B. Cash and equivalents stand at $1.22B.
SYY has a beta of 0.40, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for SYSCO CORP is 74/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
SYSCO CORP Revenue and Earnings History — Quarterly Trend
In TTM 2026, SYSCO CORP reported revenue of $82.27B and earnings per share (EPS) of $0.81. Net income for the quarter was $1.66B. Gross margin was 18.3%. Operating income came in at $2.87B.
In Q2 2025, SYSCO CORP reported revenue of $20.76B and earnings per share (EPS) of $0.81. Net income for the quarter was $389M. Gross margin was 18.3%. Operating income came in at $692M.
In Q2 2026, SYSCO CORP reported revenue of $20.76B and earnings per share (EPS) of $0.81. Net income for the quarter was $389M. Gross margin was 18.3%. Revenue grew 0.0% year-over-year compared to Q2 2025. Operating income came in at $692M.
In Q1 2026, SYSCO CORP reported revenue of $21.15B and earnings per share (EPS) of $0.99. Net income for the quarter was $476M. Gross margin was 18.4%. Revenue grew 3.2% year-over-year compared to Q1 2025. Operating income came in at $800M.
Over the past 8 quarters, SYSCO CORP has demonstrated a growth trajectory, with revenue expanding from $78.84B to $82.27B. Investors analyzing SYY stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
SYY Dividend Yield and Income Analysis
SYSCO CORP (SYY) currently pays a dividend yield of 2.9%. At this yield, a $10,000 investment in SYY stock would generate approximately $$285.00 in annual dividend income. This compares to the Consumer Staples sector average dividend yield of 0.4%, meaning SYY offers above-average income for its sector.
SYY Momentum and Technical Analysis Profile
SYSCO CORP (SYY) has a momentum factor score of 49/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 63/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 19/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
SYY vs Competitors — Consumer Staples Sector Ranking and Peer Comparison
Comparing SYY against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full SYY vs S&P 500 (SPY) comparison to assess how SYSCO CORP stacks up against the broader market across all factor dimensions.
SYY Next Earnings Date
No upcoming earnings date has been announced for SYSCO CORP (SYY) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy SYY? — Investment Thesis Summary
SYSCO CORP presents a balanced picture with arguments on both sides. Low volatility (stability score 74/100) reduces downside risk.
In summary, SYSCO CORP (SYY) earns a Hold rating with a composite score of 50.9/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on SYY stock.
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Institutional Research Dossier
SYSCO CORP (SYY) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
We maintain a Hold rating on Sysco (SYY), driven by a mixed outlook. While the company benefits from its dominant market share and relatively stable demand in the foodservice industry, its valuation appears stretched compared to peers, and recent free cash flow generation is concerning. The company's ability to improve profitability and manage its debt load will be critical for future performance.
Sysco's scale provides a significant advantage, but its high debt and relatively low organic revenue growth limit upside potential. The current valuation doesn't offer a compelling risk/reward profile, justifying our Hold rating. Investors should monitor Sysco's progress in improving free cash flow and reducing its debt burden before considering a more bullish stance.
Business Strategy & Overview
Sysco Corporation operates as a major distributor of food and related products to the foodservice industry. Its core strategy revolves around leveraging its extensive distribution network and scale to provide a wide range of products and services to its customers. The company serves a diverse customer base, including restaurants, healthcare facilities, educational institutions, and hospitality businesses. Sysco's business model is predicated on efficient logistics, supply chain management, and customer service.
The company's revenue is generated primarily through the sale of food and non-food products. Sysco's strategic positioning involves maintaining a broad product portfolio, offering value-added services such as menu planning and inventory management, and expanding its market presence through acquisitions and organic growth. The company operates through several segments, including U.S. Foodservice Operations, International Foodservice Operations, and SYGMA, each catering to specific market segments and geographic regions.
Sysco's product pipeline is focused on expanding its private-label offerings and introducing innovative products to meet evolving customer demands. The company invests in technology and infrastructure to improve its operational efficiency and enhance its customer experience. In the competitive landscape, Sysco faces competition from other large distributors, regional players, and direct sourcing by larger restaurant chains. The company differentiates itself through its scale, product breadth, and value-added services.
Sysco's industry context is characterized by relatively stable demand, driven by the consistent need for food and related products in the foodservice sector. However, the industry is also subject to fluctuations in food prices, supply chain disruptions, and changing consumer preferences. Sysco's ability to navigate these challenges and maintain its competitive advantage will be crucial for its long-term success. The company's focus on operational efficiency and customer service positions it well to capitalize on growth opportunities in the foodservice market.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
1.4%
Sector: 3.1%
-57% VS SCTR
Economic Moat Analysis
Sysco possesses a Narrow economic moat, primarily derived from its cost advantages and efficient scale. The company's extensive distribution network and large purchasing volume enable it to negotiate favorable terms with suppliers, resulting in lower costs compared to smaller competitors. This cost advantage allows Sysco to offer competitive pricing and maintain profitability in a relatively low-margin industry.
The company's efficient scale is another source of its moat. Sysco's vast distribution network and infrastructure create significant barriers to entry for new competitors. Replicating Sysco's scale would require substantial capital investment and time, making it difficult for new entrants to effectively compete. This efficient scale allows Sysco to serve a wide range of customers and maintain its dominant market share.
However, Sysco's moat is not as wide as some of its peers in other industries. The foodservice distribution industry is characterized by intense competition, and customers have multiple options for sourcing their food and related products. Switching costs are relatively low, as customers can easily switch to alternative suppliers if they offer better pricing or service. This limits Sysco's ability to raise prices significantly without losing market share.
Furthermore, Sysco's intangible assets are not particularly strong. While the company has a well-established brand name, it does not possess unique intellectual property or proprietary technology that provides a significant competitive advantage. The company's competitive advantage is primarily based on its operational efficiency and scale, which can be replicated by other large distributors over time. Therefore, while Sysco has a defensible competitive position, its moat is not impenetrable.
The company's ability to maintain and expand its moat will depend on its continued focus on operational efficiency, customer service, and strategic acquisitions. Investing in technology and infrastructure to further optimize its distribution network and enhance its customer experience will be crucial for maintaining its cost advantage and efficient scale. Additionally, strategic acquisitions can help Sysco expand its market presence and strengthen its competitive position. However, the company must also manage its debt load and maintain its financial flexibility to effectively compete in the long term.
Financial Health & Profitability
Sysco's financial health presents a mixed picture. While the company generates substantial revenue, its profitability and cash flow generation have been inconsistent. The company's revenue has grown modestly in recent years, with revenue increasing from $76.32B in FY2023 to $81.37B in FY2025. However, revenue growth has been relatively slow compared to the sector average.
Sysco's gross margin has remained relatively stable at around 18.3%-18.6% over the past few years. However, this is significantly lower than the sector average of 26.0%, indicating that Sysco faces challenges in maintaining its profitability. The company's operating margin has also been relatively low, ranging from 3.3% to 4.1% over the past few years, slightly above the sector average of 3.1%. Sysco's net margin has been even lower, ranging from 1.7% to 2.0%, slightly above the sector average.
Sysco's return on equity (ROE) is exceptionally high at 72.5%, significantly above the sector average of 7.8%. However, this high ROE is largely driven by the company's high leverage, as evidenced by its debt-to-equity ratio of 1,091.00, which is significantly higher than the sector average of 70.50. This high leverage poses a significant risk to the company's financial stability.
Sysco's free cash flow (FCF) generation has been a concern. The company reported negative FCF of $-327.18M in Q2 FY2026 and negative FCF for the TTM period. This is a significant deterioration compared to the FCF of $971.51M in FY2024. The negative FCF raises concerns about the company's ability to fund its operations and service its debt. The company's total debt stands at $13.59B, while its total cash is $1.22B, indicating a high level of financial leverage.
Overall, Sysco's financial health is characterized by high revenue, relatively low margins, high leverage, and inconsistent cash flow generation. The company's high ROE is largely driven by its high leverage, which poses a significant risk. The negative FCF is a major concern, and the company needs to improve its cash flow generation to maintain its financial stability. Investors should closely monitor Sysco's progress in improving its profitability and managing its debt load.
Valuation Assessment
Sysco's valuation appears stretched compared to its peers and historical performance. The company's P/E ratio is 100.4x, significantly higher than the sector average of 34.2x. This suggests that the market has high expectations for Sysco's future earnings growth, which may not be justified given its relatively slow revenue growth and inconsistent profitability.
Sysco's EV/EBITDA ratio is 10.5x, also higher than the sector average of 7.3x. This indicates that the company is relatively expensive compared to its peers based on its enterprise value and earnings before interest, taxes, depreciation, and amortization. The high EV/EBITDA ratio suggests that the market is willing to pay a premium for Sysco's earnings, which may not be sustainable in the long term.
Given the company's negative free cash flow, a traditional FCF yield analysis is not meaningful. The negative FCF raises concerns about the company's ability to generate cash and return value to shareholders. The company's high debt load also limits its financial flexibility and increases its risk profile.
Compared to its historical performance, Sysco's current valuation is also relatively high. The company's P/E ratio has historically been lower, and its EV/EBITDA ratio has also been lower. This suggests that the market's expectations for Sysco's future performance have increased, which may not be justified given its recent financial performance.
Overall, Sysco's valuation appears expensive based on its P/E ratio, EV/EBITDA ratio, and negative free cash flow. The company's high debt load and inconsistent profitability also raise concerns about its ability to justify its current valuation. Investors should exercise caution when considering an investment in Sysco at its current valuation.
Risk & Uncertainty
Sysco faces several specific risks and uncertainties that could negatively impact its business and financial performance. One of the primary risks is competition. The foodservice distribution industry is highly competitive, with numerous large and small players vying for market share. Increased competition could lead to pricing pressure, reduced margins, and loss of market share for Sysco.
Another significant risk is food price inflation. Fluctuations in food prices can significantly impact Sysco's profitability. If food prices increase, Sysco may not be able to pass on the full cost increase to its customers, which could reduce its margins. Conversely, if food prices decrease, Sysco may face pressure to lower its prices, which could also reduce its margins.
Sysco's high debt load also poses a significant risk. The company has a substantial amount of debt, which increases its financial leverage and makes it more vulnerable to economic downturns. If Sysco's earnings decline, it may struggle to service its debt, which could lead to financial distress.
Supply chain disruptions are another risk factor. Disruptions in the supply chain, such as transportation delays or shortages of key products, could negatively impact Sysco's ability to meet customer demand and maintain its profitability. These disruptions can be caused by various factors, including weather events, labor disputes, and geopolitical instability.
Finally, changes in consumer preferences could also pose a risk to Sysco. If consumer preferences shift away from the types of food and products that Sysco distributes, the company's sales and profitability could decline. Sysco needs to adapt to changing consumer preferences and offer a diverse range of products to meet evolving customer demands.
Bulls Say / Bears Say
The Bull Case
BULL VIEWSysco's dominant market share and extensive distribution network provide a significant competitive advantage, allowing it to maintain its leading position in the foodservice industry.
BULL VIEWThe company's focus on operational efficiency and cost management will drive improved profitability and free cash flow generation in the long term.
BULL VIEWStrategic acquisitions and expansion into new markets will fuel revenue growth and enhance Sysco's market presence.
The Bear Case
BEAR VIEWSysco's high debt load and negative free cash flow raise concerns about its financial stability and ability to invest in future growth.
BEAR VIEWIntense competition and fluctuating food prices will continue to pressure Sysco's margins and limit its profitability.
BEAR VIEWThe company's stretched valuation does not reflect its relatively slow revenue growth and inconsistent financial performance.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score SYY and 4,400+ other equities.
SYSCO CORP exhibits a 215% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
6.1%
Sector: 3.1%
Gross Margin
Pricing power and cost efficiency
18.3%
Sector: 26.2%
Operating Margin
Core business profitability
3.5%
Sector: 2.9%
Net Margin
Bottom-line profitability
2.0%
Sector: 1.6%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield0.38%
Yield Delta+650%
Income Projection audit
A $10,000 investment would generate approximately $285 annually in dividends at the current trailing rate.
