Sysco Earnings: Solid Growth in Second Fiscal Quarter, but Shares Look Fairly Valued

Wide-moat Sysco delivered a strong (December-ended) fiscal 2024 second quarter that puts it well within sight of its full-year guidance and our forecast. Sales grew nearly 4% year over year, with an adjusted operating margin of 4%, up about 30 basis points over the prior year. The company reaffirmed its fiscal 2024 guidance of mid-single-digit sales growth (to approximately $80 billion) and adjusted EPS growth of 5%-10% (to $4.20-$4.40). This outlook compares with our fiscal 2024 forecast of $79.7 billion in sales and adjusted EPS of $4.38. We don’t expect to change our forecasts materially or our fair value estimate of $78 per share. But, at present, shares look roughly fairly valued to us after a 7% post-report jump on Jan. 30.