Sysco Corporation (NYSE: SYY) shares have advanced from $74.14 above $86 since the beginning of January 2021, and the current price stands around $80.51. Sysco reported softer than expected third-quarter results this month; still, the company’s management expects to see improving demand trends as restrictions ease in the areas in which Sysco operates.
Fundamental analysis: The company’s business remains under pressure
Sysco Corporation is an American multinational corporation that distributes food products and kitchen equipment in more than 90 different countries worldwide. The Covid-19 pandemic continues to impacts the company’s business, and Sysco reported softer than expected third-quarter results this month.
Total revenue has decreased by -13.9% Y/Y to $11.8 billion, while GAAP EPS in the third quarter was $0.17 (missed by $0.01). Total revenue has decreased above expectations (-$170 million), but the company expects to see improving demand trends as restrictions ease in the areas in which Sysco operates.
“We see consistently improving demand trends from our customers in the United States, and we are ready to execute in International as markets reopen. Sysco has made substantial progress against our transformation agenda, as we simultaneously invest in growth and transform our company to serve our customers better,” said Kevin Hourican, Sysco’s president and chief executive officer.
The revenues of the International Foodservice Operations segment have decreased by -31.3% compared to the same period last year and delivered an operating loss of $121.5 million. Sysco is a risky investment at the current share price with the expected continued headwinds and potential duration or other implications of the coronavirus (“COVID-19”) pandemic.
Sysco Corporation trades at more than seventeen times 2020 EBITDA, the book value per share is less than $3, and the current dividend yield is around
