Sysco Corporation (SYY) Stock Valuation — DCF Analysis
Food Distribution · NYSE
Current Price
$79.19
Intrinsic Value
$87.11
+9.1% margin of safety
COMPETITIVE MOAT
↑Vast Distribution Network
Sysco's extensive network of distribution centers and delivery fleet creates significant logistical advantages. This scale makes it difficult for smaller competitors to replicate their reach and efficiency.
↑Customer Relationships & Switching Costs
Deeply entrenched relationships with a diverse customer base, from restaurants to hospitals, foster loyalty. The integration of Sysco's services into their operations creates high switching costs for clients.
↑Economies of Scale
As the largest food distributor, Sysco benefits from substantial purchasing power and operational efficiencies. This allows them to negotiate better prices and offer competitive terms to customers.
INVESTMENT RISKS
↓Labor and Supply Chain Disruptions
The food distribution industry is susceptible to labor shortages and disruptions in the food supply chain. These can impact Sysco's ability to deliver products on time and at cost.
↓Intense Competition
While large, Sysco faces competition from other national distributors, regional players, and direct-to-consumer models. Price wars and service innovations can erode market share.
↓Food Safety and Regulatory Compliance
Maintaining stringent food safety standards and adhering to complex regulations is critical. Any lapse can lead to reputational damage and significant financial penalties.
Base case
SYY base case valuation
A base case discounted cash flow model for SYY estimates an intrinsic value of about $87.11 per share, against a current price of $79.19. The model assumes 6.6% annual free cash flow growth, a 10.0% discount rate, and a 19x exit multiple.
Intrinsic Value
$87.11
Margin of safety
+9.1%
Expected annual return
+1.9%
Base case assumptions: 6.6% annual growth, 10.0% discount rate, 19x exit multiple, 5 year projection. Data as of 2026-06-12.
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 (SYY) stands as a prominent distributor and marketer of food and related goods, primarily serving the "food-away-from-home" sector across global markets, including the United States, Canada, the United Kingdom, and France. The company structures its operations across several key divisions: U.S. Foodservice Operations, International Foodservice Operations, SYGMA, and Other segments. The extensive inventory includes a wide variety of food items. These range from frozen products such as meats, seafood, prepared entrées, fruits, vegetables, and desserts, to shelf-stable canned and dry goods. Sysco also supplies fresh meats, seafood, dairy products, diverse beverages, specialized imported items, and fresh produce. Beyond culinary provisions, Sysco furnishes essential non-food supplies crucial for foodservice establishments. These encompass disposable paper products (like napkins, plates, and cups), tableware (including china and silverware), various cookware items (pots, pans, and utensils), a broad selection of restaurant and kitchen equipment and supplies, and cleaning solutions. Its broad customer base spans numerous foodservice venues, such as independent and chain restaurants, hospitals, nursing homes, schools, colleges, hotels, motels, and industrial caterers. As of August 27, 2021, its operations were supported by an impressive network of 343 distribution facilities. Founded in 1969, Sysco Corporation maintains its headquarters 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
19.0x
EV/EBITDA
13.0x
FCF Yield
5.28%
Debt/Equity
6.76x
Based on trailing twelve-month data, SYY shows a free cash flow per share of $4.17 and a ROIC of 11.8%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 19.0x and FCF yield of 5.28% are important context metrics when evaluating SYY's stock valuation relative to peers.
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 $79.19, 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 19.0x with a free cash flow yield of 5.28%. 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 13.0x, 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 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.