Piper Sandler increased its price objective on Sysco to $83.00 from $80.00 while keeping a Neutral rating after the foodservice distributor published its fiscal second-quarter 2026 results. The stock was trading at $83.92 at the time of reporting, just above the revised target and close to its 52-week high of $83.96. Analysis of fair value metrics also indicates the shares appear undervalued on that assessment.
Sysco reported total U.S. Foodservice - USFS - case growth of 0.8% for the quarter, roughly in line with expectations. Within that broader segment, U.S. Local case growth moved into positive territory at 1.2%, a development the company and the market highlighted as meaningful for the business. On a trailing twelve-month basis, Sysco recorded revenue of $82.03 billion, representing a 2.92% increase year-over-year.
Following the earnings release and subsequent conference call, Sysco shares climbed 11.0% as investors reacted favorably to management’s forward guidance. The company indicated that Local case growth should be at least 2.5% in each of the next two quarters, a target Piper Sandler said would imply an underlying improvement in the two-year trend for this segment if achieved. Over the past year the stock has delivered a total return of 19.36%, with a reported beta of 0.62.
On the earnings front, Sysco topped expectations for the quarter, reporting adjusted earnings per share of $0.99 compared with a consensus forecast of $0.98. Quarterly revenue came in at $21 billion, slightly above the anticipated $20.78 billion. With two quarters still remaining in the fiscal year, the company signaled it was tracking toward the high end of its previously communicated adjusted EPS guidance range of $4.50 to $4.60 for fiscal 2026.
Key valuation and shareholder metrics cited alongside the results include a current price-to-earnings ratio of 22.3 based on diluted EPS of $3.73 over the last twelve months, and a dividend yield of 2.57%. The company has maintained dividend payments for 56 consecutive years. An industry financial-health assessment describes Sysco as a notable participant in the Consumer Staples Distribution & Retail category with a 'GOOD' overall financial health score.
Piper Sandler’s decision to lift the price target to $83 while retaining a Neutral stance reflects the firm’s view that the mix of modest but improving case trends, guidance toward the top of the fiscal year EPS range, and the recent market reaction do not yet justify a higher conviction rating. The analyst noted that meeting the 2.5%-plus Local case growth hurdle for the coming quarters would represent an improvement in the two-year trend for that important business unit.
Investors and income-focused shareholders also have noted the company’s long record of dividend payouts and the yield reported with the latest figures. The combination of stable dividend policy, a modestly higher target from an influential sell-side firm, and the beat on both revenue and EPS for the quarter underpin the market’s stronger near-term response.
Summary
After releasing fiscal Q2 results that included a slight beat on revenue and EPS and a return to positive U.S. Local case growth, Sysco saw its stock jump and Piper Sandler raise its price target to $83 from $80 while keeping a Neutral rating. Management’s forward guidance and an indicated move toward the high end of fiscal 2026 adjusted EPS guidance supported the market reaction.
Key points
- Piper Sandler raised the price target to $83 from $80 and kept a Neutral rating - impacts equity research and investor sentiment.
- Sysco reported total U.S. Foodservice case growth of 0.8% and U.S. Local case growth of 1.2% for the quarter, with Local growth expected to be at least 2.5% in each of the next two quarters - impacts foodservice and distribution sectors.
- Quarterly results beat expectations with EPS of $0.99 and revenue of $21 billion, and the company is pointing toward the high end of its fiscal 2026 adjusted EPS range - relevant to markets and income investors.
Risks and uncertainties
- If Sysco fails to achieve the projected Local case growth of at least 2.5% in the next two quarters, the anticipated improvement in the two-year trend for that segment would not materialize - this affects the food distribution and restaurant supply chains.
- Valuation remains a consideration: although the shares appear undervalued by a fair value assessment, the P/E ratio of 22.3 and recent stock price levels near a 52-week high leave room for market volatility - relevant to equity markets and investor portfolios.
- Guidance sensitivity - the company is guiding toward the high end of its fiscal EPS range with two quarters remaining; any deviation in actual performance could change investor sentiment and analyst outlooks - impacts markets and dividend-focused investors.