Sysco (SYY) Stock Forecast & Price Target

Sysco, as the largest US foodservice distributor with a significant 17% market share in a $370 billion domestic market, is projected to achieve a sales growth of 2% in fiscal 2025, reflecting an improvement in organic growth due to favorable macroeconomic conditions. The company is also expected to report a total sales growth of 3.5% in fiscal 2026, accompanied by a 4.5% increase in adjusted EBITDA and a slight margin expansion of 5 basis points, projecting earnings per share of $4.68. Key positive indicators include the potential for sustained economic growth, which could enhance both top- and bottom-line results, further bolstering Sysco’s profitability and overall financial performance.

Sysco has experienced a deterioration in its segment EBIT margins, which have eroded by an average of 35 basis points over the past 18 months, primarily due to mix-related gross margin pressure and investments in its sales force. The US segment, accountable for a significant portion of the company’s revenue and investor sentiment, is projected to further decline with an estimated drop of 25 basis points in margins. Additionally, a decline in US local case growth of approximately 1% is anticipated, adding further strain to Sysco's financial outlook.