Sysco Corporation (SYY) Intrinsic Value & DCF Valuation
Food Distribution · NYSE
Current Price
$85.32
Intrinsic Value
$90.35
+5.6% margin of safety
What Is Sysco Corporation's Intrinsic Value?
As of 2026-07-29, the base-case DCF model estimates the intrinsic value of Sysco Corporation (SYY) at $90.35 per share, compared with a market price of $85.32, a margin of safety of +5.6%. The base case assumes 6.6% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $73.15 to $110.12. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Sysco Corporation (SYY) Undervalued?
At $85.32, SYY trades about 5.6% below the base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety required before calling a stock undervalued.
COMPETITIVE MOAT
↑Extensive Distribution Network
Sysco operates a vast network of distribution centers and a large fleet. This infrastructure creates significant barriers to entry for new competitors seeking to match its reach and efficiency.
↑Strong Customer Relationships
The company has cultivated deep relationships with a diverse customer base, including restaurants and healthcare facilities. These long-standing ties foster loyalty and create switching costs.
↑Economies of Scale
Sysco's sheer size allows for significant purchasing power and operational efficiencies. This scale translates into cost advantages that smaller rivals struggle to replicate.
INVESTMENT RISKS
↓Customer Concentration
While Sysco serves many customers, a significant portion of its revenue could be tied to a few large accounts. The loss of a major client could materially impact financial performance.
↓Food Safety and Supply Chain Disruptions
Any foodborne illness outbreak or disruption in the supply chain, such as natural disasters or pandemics, could severely damage Sysco's reputation and operational capabilities.
↓Intense Competition and Margin Pressure
The food distribution market is highly competitive, with numerous regional and national players. This can lead to price wars and pressure on profit margins.
Base case
SYY base case valuation
Intrinsic Value
$90.35
Margin of safety
+5.6%
Expected annual return
+1.2%
Base case assumptions: 6.6% annual growth, 10.0% discount rate, 20x exit multiple, 5 year projection. Data as of 2026-07-29.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the SYY valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Sysco Corporation respond.
Open DCF Calculator for SYYCompany Overview
Sysco Corporation, through its subsidiaries, engages in the marketing and distribution of various food and related products to the foodservice or food-away-from-home industry in the United States, Canada, the United Kingdom, France, and internationally. It operates through U.S. Foodservice Operations, International Foodservice Operations, SYGMA, and Other segments. The company distributes frozen food, such as meat, seafood, fully prepared entrées, fruits, vegetables, and desserts; canned and dry food products; fresh meat and seafood products; dairy products; beverages; imported specialties; and fresh produce products. It also supplies various non-food items, including paper products comprising disposable napkins, plates, and cups; tableware consisting of glassware and silverware; cookware, such as pots, pans, and utensils; restaurant and kitchen equipment and supplies; and cleaning supplies. It serves restaurants, hospitals and nursing facilities, schools and colleges, hotels and motels, industrial caterers, and other foodservice venues. Sysco Corporation was incorporated in 1969 and is headquartered in Houston, Texas.
Financial Metrics — SYY Stock Valuation Data
Revenue/Share (TTM)
$174.34
FCF/Share (TTM)
$4.17
ROIC (TTM)
11.8%
ROE (TTM)
81.9%
P/FCF
20.4x
EV/EBITDA
13.8x
FCF Yield
4.90%
Debt/Equity
6.76x
On a trailing twelve-month basis, SYY generates free cash flow per share of $4.17 alongside a ROIC of 11.8%, both central inputs for a DCF valuation. Its P/FCF ratio of 20.4x and FCF yield of 4.90% then frame how SYY is priced against peers on a cash flow basis.
Frequently Asked Questions
What is the intrinsic value of SYY?
Sysco Corporation currently generates $4.17 in free cash flow per share. At the current price of $85.32, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is SYY undervalued?
SYY trades at a P/FCF ratio of 20.4x with a free cash flow yield of 4.90%. This P/FCF is in a moderate range. However, whether SYY is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value SYY stock using DCF?
To perform a DCF valuation on Sysco Corporation: (1) Start with the trailing free cash flow per share ($4.17) as the base, (2) project future FCF growth over 5-10 years based on Food Distribution industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting SYY's risk profile — with a debt-to-equity of 6.76x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to SYY?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Sysco Corporation, this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Food Distribution trends, then discounting those amounts to today's dollars. SYY's ROIC of 11.8% shows moderate capital returns.
How does WACC affect SYY stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For SYY, with a debt-to-equity ratio of 6.76x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 13.8x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See SYY PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Consumer Defensive valuationsDCF and P/E value SYY with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-07-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.