Sysco Corporation (NYSE:SYY) is a global leader in distributing food products to a wide range of customers. The company supplies restaurants, healthcare facilities, educational institutions, and lodging establishments with food and related items. As a major player in the foodservice industry, it operates on a large scale, competing with other distributors like US Foods.
On April 28, 2026, Deutsche Bank downgraded its rating for Sysco to "Hold" from a previous "Buy" rating. This change occurred when the stock price was $73.37. The downgrade reflects a more cautious outlook on the company's performance, influenced by its recent financial results and rising operational costs.
The rating change follows Sysco's third-quarter fiscal 2026 results, where it missed analyst expectations. As highlighted by Zacks, the company reported adjusted earnings of $0.94 per share, just below the consensus estimate of $0.95. This figure also marks a 2.1% decrease compared to the same quarter in the previous year.
While sales increased by 4.7% to $20.50 billion, they still fell short of the anticipated $20.59 billion. A significant concern is the 8.4% year-over-year rise in adjusted operating expenses, which puts pressure on profitability. As reported by GlobeNewswire, this led to a 9.1% drop in operating income to $619 million.
Despite these challenges, Sysco's gross profit grew 6.5% to $3.80 billion, and its free cash flow increased by 19% to $1.10 billion. The company also confirmed its full-year guidance, expecting adjusted earnings per share to be at the high end of its previously announced $4.50 to $4.60 range.
