SYY's Sales to Expand in the December Quarter
Analyst Gregory R Badishkanian of Citi upgraded Sysco Corp (NYSE: SYY) from “hold” to “buy,” while raising his estimates for the company. The target price for SYY has been raised from $28 to $34.
Recent checks conducted by Citi on the industry indicate sequential m/m improvement in real sales. The upgrade in the rating is based on these findings. With real sales trends nearing flat y/y, the analyst expects only a 3%-4% decline in sales for the December quarter.
According to Citi, Sysco Corp has an opportunity to expand its sales in the mid to high single digits. There is also a possibility of SYY achieving healthy margin expansion through its cost control initiatives.
With SYY stepping up promotions in the early part of the calendar year, the pricing environment has not deteriorated further in the December quarter, the analyst said. Citi has raised its EPS estimates for 2009 from $1.83 to $1.86.
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Posted-In: Citi Gregory R BadishkanianAnalyst Color Upgrades Price Target Analyst Ratings