Credit Suisse Downgrades Sysco (SYY) to Neutral; Upside Limited
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Credit Suisse downgraded Sysco (NYSE: SYY) from Outperform to Neutral with a price target of $55.00 (from $59.00), saying upside is limited after sharp revaluation.
Analyst Edward Kelly commented, " SYY's return to blue chip status within consumer staples seems nearly complete, as better financial discipline and execution have allowed the company to recapture its old form. A 50% move in the stock over the last 18 months has yielded a sharp revaluation. We now see the risk/reward as balanced. We continue to believe the outlook for the company is good and still expect management to raise its three-year financial target soon, but this seems fully appreciated by the consensus and earnings upside now looks limited. Thus we are lowering our rating to Neutral. We reduce our target price to $55 from $59, mostly to reflect recent multiple compression in consumer staples."
Shares of Sysco closed at $53.50 yesterday.
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