Sysco CorporationSYYNYSE

Overview Intelligence Charts News Fundamentals Key Metrics TTM Financials Earnings Growth Rating Analysts Institutional Peers Historical

DCF Valuation

DCF Valuation Summary

Strong Buy

Fair Value: $373.00 per share(market-calibrated)

+312.2%

Upside to Fair Value

Current

$90.48

Pure Model

$399.97

Fair Value

$373.00

Bull Case

$491.77

Bear Case

$324.09

Market Reality Check

Model Terminal Growth

2.50%

Market-Implied Growth

0.50%

Calibrated Growth

1.80%

Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $399.97.

What's Driving This Ratingfor SYY

✓

CapEx already efficient

CapEx at 0.89% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

↑

Margin expansion modeled

Current EBIT margin is 4.91% — below the sector mature average of 16.00%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $14.2B (13.09% margin).

→

Moderate revenue growth

Analyst consensus projects 3.77% revenue growth, fading to 2.50% by Year 10. Revenue reaches $108.4B (vs $81.4B today).

🎯

Market pricing in lower growth than model

The market implies only 0.50% perpetual growth — 200bps below the model's 2.50%. This suggests the market sees headwinds or risks not in the model.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 71.03% indicates efficient cash generation. FCF reaches $11.0B by Year 10 (10.12% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)0.60

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)7.21%

Cost of Debt

Pre-tax Cost of Debt4.52%

Tax Rate24.31%

After-tax Cost of Debt3.42%

Equity Weight (E/V)75.29%

Debt Weight (D/V)24.71%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (75.29% × 7.21%) + (24.71% × 3.42%)

= 6.27%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$84.4B	$91.6B	$95.8B	$100.7B	$108.4B
EBIT	$4.1B	$4.5B	$6.8B	$10.4B	$14.2B
Tax	$1.0B	$1.1B	$1.7B	$2.5B	$3.5B
NOPAT	$3.1B	$3.4B	$5.2B	$7.9B	$10.7B
+ Depreciation	$976M	$1.1B	$1.1B	$1.2B	$1.3B
- Capex	$754M	$818M	$856M	$899M	$968M
- Δ NWC	$66M	$62M	$50M	$53M	$57M
Free Cash Flow	$3.3B	$3.6B	$5.4B	$8.1B	$11.0B
Discount Factor	0.941	0.833	0.738	0.653	0.544
Present Value	$3.1B	$3.0B	$4.0B	$5.3B	$6.0B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$11.0B

Terminal Growth Rate2.50%

WACC6.27%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$298.1B

PV of Terminal Value$162.3B

Exit Multiple Method

Year 10 EBITDA$15.4B

Exit Multiple (EV/EBITDA)20.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$309.0B

PV of Terminal Value$168.2B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$43.5B

PV of Terminal Value$162.3B

Enterprise Value$205.7B

(-) Net Debt$13.4B

Equity Value$192.3B

Shares Outstanding488M

Price per Share$393.93

Exit Multiple Method

PV of Projected FCFs$43.5B

PV of Terminal Value$168.2B

Enterprise Value$211.6B

(-) Net Debt$13.4B

Equity Value$198.2B

Shares Outstanding488M

Price per Share$406.01

Pure Model Fair Value

$399.97

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	1.50%	2.00%	2.50%	3.00%	3.50%
4.27%	$552.00	$613.20	$646.23	$618.20	$591.49
5.27%	$437.21	$465.88	$504.88	$561.05	$591.49
6.27%	$363.87	$379.81	$399.97	$426.30	$462.12
7.27%	$311.27	$321.08	$332.96	$347.61	$366.14
8.27%	$270.85	$277.32	$284.91	$293.94	$304.86

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$324.09

258.2% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 0.75

Base Case

$399.97

342.1% vs current

• Analyst consensus
• Terminal growth: 2.5%
• Beta: 0.60

Bull Case

$491.77

443.5% vs current

• +25% vs analyst consensus
• Terminal growth: 3.0%
• Beta: 0.51

Key Assumptions & Drivers• Consumer Defensive Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth3.77%

Year 3 Revenue Growth3.26%

Year 5 Revenue Growth2.50%

Year 7 Revenue Growth2.50%

Year 10 Revenue Growth2.50%

Terminal Growth Rate2.50%

Margin & Efficiency

Current EBIT Margin4.91%

Terminal EBIT Margin16.00%

Tax Rate24.31%

Historical Capex / Rev0.89%

NWC / Revenue2.16%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 20x EV/EBITDA (Consumer Defensive sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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