Sysco's Sales Perform Well, But Case Growth Concerns Weigh On Stock, Say Analysts

Group 1 - Truist Securities analyst Jake Bartlett reiterated a Buy rating on Sysco Corp (SYY) shares and lowered the price forecast from $85 to $83 [1] - For the second quarter, adjusted EBITDA was $969 million, slightly below the analyst's estimate of $975 million and the consensus of $973 million, primarily due to operating costs [1] - Total sales reached $20.151 billion, close to the analyst's estimate of $20.218 billion and the consensus of $20.097 billion, while EPS of $0.93 exceeded both estimates of $0.92 [2] Group 2 - US Foodservice (USFS) case growth slowed to 1.4%, down from 2.7% in the first quarter, despite an improvement in restaurant traffic by approximately 200 basis points [2][3] - The analyst expects USFS case growth to improve due to macro tailwinds, enhanced sales team stability, and a stronger sales force [3] - Concerns have been raised about ongoing weakness in local case growth, which is critical for stock performance in the coming quarters [5] Group 3 - The analyst remains optimistic about Sysco's initiatives to boost sales and expand margins, which could drive accelerated EBITDA growth [4] - However, the company's relatively weak independent case growth compared to restaurant traffic trends limits expectations for significant stock upside [4] - The analyst anticipates a return to positive local case growth by the first half of 2026, aligning with investments in the sales force [6]