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.
For further details see:
Sysco: A Great Business At A Fair Price