UPDATE: Barclays Downgrades Sysco (SYY) to Underweight; Disturbing Analyst Meeting

May 18, 2012 7:25 AM EDT
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Price: $53.81 +0.35%

Rating Summary:
    5 Buy, 10 Hold, 2 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 30 | Down: 30 | New: 23
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(Updated - May 18, 2012 1:58 PM EDT)

Barclays downgraded Sysco (NYSE: SYY) from Equalweight to Underweight, price target lowered $1 to $27.

Analyst, Meredith Adler, said, "At Sysco's 2012 analyst meeting, we heard more urgency than in the past about the need to manage costs, as well as more detail about the steps that will be taken. We see great risk in this, however, since all of SYY's initiatives require the organization to accept far greater centralization than historically. Some projects will also impact customers, who are still struggling with soft demand yet have lots of choice of distributors so will not tolerate much disruption. On top of this, high food inflation is not being passed along fully by restaurants or distributors, and pricing has become more aggressive as all competitors try to take market share, so SYY's gross margin has been under great pressure, and no recovery is in sight, in our view."

FY13 EPS estimate cut from $1.93 to $1.86.

For an analyst ratings summary and ratings history on Sysco click here. For more ratings news on Sysco click here.

Shares of Sysco closed at $27.79 yesterday.

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