Sysco (SYY) doesn’t move look this. Really, it doesn’t.
Sysco’s shares have gained 4.51% to $34.03 at 1:22 p.m. today, which, if the stock closed there now, would be the biggest gain since August 2012. It’s also just the 31st time in 2612 trading days that Sysco has move 4.51% or more in either direction in a single day, just 1.2% of the time. It also has a beta, or volatility relative to the S&P 500, of just 0.62.
Most of the big-move days, I imagine, are like today, when Sysco got a big boost from its fiscal first-quarter earnings report. MarketWatch has the details:
For the period ended Sept. 28, Sysco reported a profit of $285.6 million, or 48 cents a share, down from $286.6 million, or 49 cents a share, a year earlier. Excluding restructuring-related expenses and other items, adjusted earnings were lower at 56 cents from 58 cents. Revenue increased 5.7% to $11.71 billion.
Analysts polled by Thomson Reuters recently expected per-share earnings of 48 cents and revenue of $11.62 billion.
Today’s move is quite a turnaround for Sysco, which plunged more than 4% on August 12 after releasing a disappointing earnings report.
Guggenheim’s John Heinbockel and Steven Forbes remain unconvinced that Sysco has fixed its problems:
We remain Neutral-rated on Sysco, believing that an ongoing challenging economic environment and pressure on gross margin to drive top-line growth (and market share) will limit EBIT growth over at least the next few quarters. The longer-term outlook could be better, as some benefit is derived from ERP, but uncertain. The shares are rising 4% pre-market (vs. a 0.40% increase in the S&P 500), possibly on lower BTS expenses as well as a greater-than-expected CP-funded share buyback. We would remain on the sidelines and expect other names, like Family Dollar (FDO), Kroger (KR), and Five Below (FIVE) to outperform from here.
Try telling that to the market today.
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