Sysco (SYY): Reassessing Valuation After New Four-Year Teamsters Labor Deal Reshapes Costs and Stability

Sysco (SYY) just locked in a four year labor deal with the Teamsters for more than 1,000 drivers and warehouse workers, bringing 34% wage increases and richer benefits that could reshape its cost and risk profile. See our latest analysis for Sysco. Despite solid earnings growth, Sysco’s recent 90 day share price return of negative 9.4 percent shows momentum has cooled, even though its five year total shareholder return of 14.7 percent remains positive and points to steady long term compounding. If this labor deal has you rethinking where stable operators fit in your portfolio, it could be worth exploring fast growing stocks with high insider ownership as a fresh set of ideas beyond the usual names. With earnings still growing and the stock trading below analyst targets, the new labor costs raise a key question: is Sysco now a quietly undervalued compounder, or has the market already priced in its next leg of growth? Most Popular Narrative Narrative: 14.3% Undervalued With Sysco last closing at $74.49 against a narrative fair value near $86.88, the current setup frames this stock as quietly mispriced. Strategic cost management and self funded initiatives targeting $100 million in profit improvement, alongside disciplined capital allocation for shareholder returns, are expected to support future cash flow and earnings growth even amidst macroeconomic uncertainties. Read the complete narrative. Want to see what powers that premium valuation? This narrative leans on compounding earnings, firmer margins, and a future multiple usually reserved for market favorites. Curious which assumptions carry the most weight in that fair value, and how much growth is really priced in? Dive into the full story to unpack the numbers behind the call. Result: Fair Value of $86.88 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, persistent macro pressure on restaurant traffic and slower independent case recovery could cap volumes. This may challenge the margin and earnings acceleration that this narrative assumes. Find out about the key risks to this Sysco narrative. Build Your Own Sysco Narrative If you see the story differently or want to stress test the assumptions yourself, you can build a custom narrative in minutes: Do it your way. A great starting point for your Sysco research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision. Ready for your next investment move? Sysco may be compelling, but you will leave potential on the table if you stop here. Use the Simply Wall St Screener to target your next edge. Target reliable income streams by scanning these 12 dividend stocks with yields > 3% that can strengthen your portfolio’s cash flow. Capitalize on secular tech trends by zeroing in on these 24 AI penny stocks shaping tomorrow’s digital infrastructure. Hunt for mispriced opportunities by tracking these 902 undervalued stocks based on cash flows that the market has yet to fully recognize. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.Mobile Infrastructure for Defense and DisasterThe next wave in robotics isn't humanoid. Its fully autonomous towers delivering 5G, ISR, and radar in under 30 minutes, anywhere.Get the investor briefing before the next round of contractsSponsored On Behalf of CiTech