Is September a good month for investing in Sysco Corporation shares?

Sysco Corporation (NYSE: SYY) shares have advanced more than 6% since the beginning of August 2021, and the current share price stands around $79. Sysco Corporation reported better than expected fourth-quarter results this month, and the company’s management expects to see strong demand trends in the upcoming quarters.

Fundamental analysis: Sysco has proven improvements throughout the fourth fiscal quarter

Sysco Corporation is an American multinational corporation that distributes food products and kitchen equipment in more than 90 countries worldwide. The foodservice segment continues to improve based on positive consumer behavior trends, which are seen to recapture the share lost to conventional grocers during the pandemic.

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Sysco Corporation’s business has proven improvements throughout the fourth fiscal quarter, and the company reported better than expected results. Total revenue has increased by 82% Y/Y to $16.14 billion, while the non-GAAP EPS was $0.71 for the fourth fiscal quarter (beats by $0.11).

The profitability for the quarter was stronger than anticipated, and it is important to mention that the business recovery continues to improve in the U.S. On a full-year basis, total revenue was down less than 1% and totaled $51.29 billion, while a net income was $524 million for the 2021 fiscal year.

The restaurant sector is near full recovery while the U.S. foodservice industry in total is now within 5% of 2019 levels.

“Sysco is best positioned to support the rapidly increasing demand due to our balance sheet, our large physical footprint, and our substantial human capital investment in salespeople and in supply chain resources. The momentum shown in the fourth quarter has continued in the first period of Fiscal 2022, where our July results have further accelerated,” said Kevin Hourican, President and Chief Executive Officer.

Technically looking, Sysco Corporation shares continue to trade in a bull market, but there are some apparent risks when it comes to investing in this stock. Sysco Corporation began the 2022 fiscal year in a solid position; still, the Delta variant of the coronavirus continues to pose downside risks.

Sysco Corporation trades at more than fourteen times TTM EBITDA, the book value per share is around $3, and the current dividend yield is around 2.3%. If we compare the total stockholders’ equity of $1.58 billion and the market capitalization of $41 billion, we can notice that this stock is not undervalued, and the current risk/reward ratio is not good enough for “value” investors.

Technical analysis: Sysco shares have advanced more than 6% since the beginning of August 2021

Sysco shares have advanced more than 6% since the beginning of August 2021, and according to technical analysis, there is no risk of a positive trend reversal for now.

Rising above $85 supports the bullish trend, and the next price target could be around $90. On the other side, if the price falls below $75, it would be a “sell” signal, and we have the open way to $70.

Summary

Sysco has proven improvements throughout the fourth fiscal quarter as the foodservice segment continues to improve based on positive consumer behavior trends. The company’s management expects to see strong demand trends in the upcoming quarters; still, shares of this company are not undervalued.

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