Is Sysco Corporation (SYY) overvalued?
On Equity Rank's model estimate, SYY trades 54% above its fair value. Sysco Corporation (SYY) last closed at $76.86; the multi-method model fair value is $49.75.
| Price | Model fair value | Price vs model |
|---|---|---|
| $76.86 | $49.75 | 55% above |
What the answer rests on
- 2 of 10 valuation methods put SYY's value above its price and 8 put it below, so the methods mostly agree.
- To justify today's price, SYY's free cash flow would need to grow about 2.7% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew -2.2% a year.
- SYY trades at 20.5 times its last year's earnings, against a median of 19.5 for 11 profitable Grocery companies.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 12% above to 61% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind SYY's fair value · What prices assume · Other companies