Here's How The Buy Side Expects Sysco To Report Monday

Feb. 3.14 | About: SYSCO Corporation (SYY)

Sysco Corp. (NYSE:SYY) is set to report FQ2 2014 earnings before the market opens on Monday, February 3rd. In December 2013, Sysco announced a $3.5 billion acquisition of US Foods which will give Sysco 27% share of the U.S. food-distribution market. This quarter analysts are expecting revenue to be up on a year-over-year basis but expectations for profit are not as high. Most analysts are projecting quarterly profit to be flat compared to last year. Here is how investors are expecting Sysco to report today.

The information below is derived from data submitted to the platform by a set of Buy Side and Independent analyst contributors.

(Click Here to see All Estimates for Sysco)

The current Wall Street consensus expectation is for Sysco to report 40c EPS and $11.353B revenue while the current consensus from Buy Side and Independent contributing analysts is 42c EPS and $11.382B revenue. This quarter the buy-side, as represented by the community, is expecting Sysco to beat the Street's expectations on both profit and revenue.

The magnitude of the difference between the Wall Street and Estimize consensus numbers often identifies opportunities to take advantage of expectations that may not have been priced into the market. In this case, we are seeing a small differential between the 2 groups' forecasts.

By tapping into a wider range of contributors including hedge-fund analysts, asset managers, independent research shops, students, and non professional investors, Estimize has created a data set that is up to 69.5% more accurate than Wall Street, but more importantly it does a better job of representing the market's actual expectations. It has been confirmed by an independent academic study from Rice University that stock prices tend to react with a more strongly associated degree to the expectation benchmark from Estimize than from the Wall Street consensus.

The distribution of estimates published by analysts on the platform range from 41c to 47c EPS and $11.339B to $11.459B in revenues. This quarter we're seeing a large distribution of estimates for Sysco.

The size of the distribution of estimates relative to previous quarters often signals whether or not the market is confident that it has priced in the expected earnings already. A larger distribution of estimates signaling less agreement in the market, which could mean more volatility post earnings.

Throughout the quarter, the Wall Street EPS estimate has remained flat while the Estimize consensus dipped from 43c to 42c. Over the same time period, Wall Street raised its revenue forecast from $11.317B to $11.353B while the Estimize community lowered its expectation from $11.392B to $11.382B. Timeliness is correlated with accuracy and downward analyst revisions going into a report are often a bearish indicator.

The analyst with the highest estimate confidence rating this quarter is sudanharry who projects 41c EPS and $11.360B in revenue. In the Winter 2014 season sudanharry was rated as the 84th best analyst and is ranked 386th overall among over 3,700 contributing analysts. This quarter sudanharry agrees with the Estimize community that Sysco will beat Wall Street's expectations on profit and revenue; however, sudanharry expects the beat to be by a smaller margin.

This quarter, year-over-year revenue is expected to be up but profit is expected to relatively flat. However, analysts on the platform are expecting Sysco to outperform the bar set by Wall Street by a small margin on both the top and bottom line.

Disclosure: No positions.