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Sysco (SYY) Gains But Lags Market: What You Should Know

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In the latest trading session, Sysco (SYY) closed at $87.36, marking a +1.17% move from the previous day. The stock lagged the S&P 500's daily gain of 2.76%. At the same time, the Dow added 2.43%, and the tech-heavy Nasdaq gained 0.13%.

Prior to today's trading, shares of the food distributor had gained 9.62% over the past month. This has outpaced the Consumer Staples sector's gain of 3.94% and the S&P 500's gain of 4.44% in that time.

Sysco will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $1.12, up 57.75% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $18.27 billion, up 13.23% from the prior-year quarter.

Any recent changes to analyst estimates for Sysco should also be noted by investors. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Sysco currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, Sysco is holding a Forward P/E ratio of 19.99. This valuation marks a premium compared to its industry's average Forward P/E of 18.01.

It is also worth noting that SYY currently has a PEG ratio of 2.22. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Food - Miscellaneous was holding an average PEG ratio of 2.8 at yesterday's closing price.

The Food - Miscellaneous industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 93, putting it in the top 37% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow SYY in the coming trading sessions, be sure to utilize Zacks.com.

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