SYY – Market expectations are for Uniform ROA to reach new peaks, but management may be concerned about food cost, revenue, and volume growth

• Sysco Corporation (SYY:USA) currently trades near historical averages relative to UAFRS-based (Uniform) Earnings, with a 22.7x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may be concerned about food cost, revenue softness, and volume growth
• Specifically, management may be concerned about further top line softness in 2020 and about the impact of food cost inflation on profitability. Furthermore, they may be exaggerating the incremental business opportunities they expect to see given their market share, and they may lack confidence in their ability to sustain local case volume growth. Finally, they may be concerned about the effectiveness of their talent acquisition model, and they may lack confidence in their ability to meet their pipeline execution guidance.