BMO Capital Raises Price Target on Sysco Corp. (SYY) Following 3Q EPS Beat

BMO Capital reiterated a Market Perform rating on Sysco Corp. (NYSE: SYY), and raised the price target to $52.00 (from $44.00), following the company's 3Q earnings report. Sysco reported adjusted EPS of $0.46, coming in ahead of consensus estimates of $0.42.

Analyst Kelly Bania commented, "While Sysco management acknowledges that weather and Easter supported favorable tailwinds in FY3Q16, the company is clearly making strong progress toward its three-year financial plan, which was recently increased to “at least $500MM” in operating income growth (from $400MM originally). We initially viewed these targets as aggressive, yet with accelerating local case growth (+3.4%, the strongest level in years) creating a favorable backdrop against which to operate, combined with company-specific initiatives to reduce administrative costs (2% administrative workforce reduction in progress and a new market structure announced today) and grow gross profit dollars, we are raising our EPS estimates. FY2017 and FY2018 shift to $2.29 and $2.53 (from $2.14 and $2.26, respectively) given greater confidence that the solid trends will continue."

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 $48.61 yesterday.

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