Barclays Maintains an 'Underweight' on Sysco (SYY); Fundamental Weakness Still Outweighs Positives
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Price: $76.38 +0.98%
Rating Summary:
15 Buy, 12 Hold, 2 Sell
Rating Trend:
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Today's Overall Ratings:
Up: 11 | Down: 18 | New: 17
Rating Summary:
15 Buy, 12 Hold, 2 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 17
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Barclays maintains an 'Underweight' on Sysco (NYSE: SYY) price target of $28.00 (from $27.00).
Analyst, Meredith Adler's negatives on the company include: SYY's underlying business trends have not improved, in our view, with 4Q12 volume growth decelerating on a two-year basis and July/August most likely weakening further. The gross margin remains under great pressure as well and is down more than 110 bps on a two-year basis, with no improvement in sight.
Also, Adler mentioned a few positives including: change in the pension plan, with the defined benefit plan being frozen for existing employees and not offered to new ones, offset by enhancements to the 401K plan; remains confident that it can find $150 million of cost reductions in FY13; free cash flow will be much better in FY13; and the company hinted that the dividend might rise again.
All in, however, the firm's analyst, said that fundamental weakness outweighs positives and believes shares will be range-bound in the $28-29. FY13 EPS estimate bumped from $1.86 to $1.91.
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 $30.14 yesterday.
Analyst, Meredith Adler's negatives on the company include: SYY's underlying business trends have not improved, in our view, with 4Q12 volume growth decelerating on a two-year basis and July/August most likely weakening further. The gross margin remains under great pressure as well and is down more than 110 bps on a two-year basis, with no improvement in sight.
Also, Adler mentioned a few positives including: change in the pension plan, with the defined benefit plan being frozen for existing employees and not offered to new ones, offset by enhancements to the 401K plan; remains confident that it can find $150 million of cost reductions in FY13; free cash flow will be much better in FY13; and the company hinted that the dividend might rise again.
All in, however, the firm's analyst, said that fundamental weakness outweighs positives and believes shares will be range-bound in the $28-29. FY13 EPS estimate bumped from $1.86 to $1.91.
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 $30.14 yesterday.
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