USFD - Sysco: A Great Business At A Fair Price

January, 08 2023 01:45 AM US Foods Holding Corp.

Summary

Sysco shares have been roughly flat over the past year, significantly outperforming the broader market.
In 2022, Sysco benefited from increased consumer spending on dining out following stay-at-home behavior in 2020-21. Sysco has also gained market share as competitors were forced to retrench.
As the largest player in the food service distribution business, Sysco generates fantastic returns on operating capital employed as a result of durable competitive advantages in both scale and scope.
Sysco has proven resilient to inflationary pressure by passing on higher costs to customers. Operating profitability has remained strong.
Trading at 19x current year EPS, I see Sysco as being fairly valued at $79/share.

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