Sysco's $29B Jetro Deal Sparks Investor Backlash Despite Growth Promises
Sysco Corp has agreed to buy Jetro, a major 'cash and carry' wholesaler, in a deal worth $29 billion. The company's CEO, Kevin Hourican, called Jetro a gem of an asset and highlighted its role in expanding Sysco's market presence. Investors, however, reacted sharply to the news, sending Sysco's share price down by over 20% at one point. The acquisition will give Sysco a significant position in the 'cash and carry' sector, a market it had limited exposure to before. Financial projections suggest the deal could generate up to $2 billion in extra free cash flow by the fourth year. Sysco plans to use these funds to raise dividends, increase share buybacks, or reinvest in the business.
Sysco expects the Jetro purchase to lift its operating margin to 6%. Earnings per share (EPS) are also forecast to grow by mid-to-high single digits in the first year alone. Despite these optimistic figures, the stock market responded negatively. After the announcement, Sysco's shares plunged to $69.55, a 16% drop from recent levels, before closing at $81.80 on March 27, 2026.
Over the past year, Sysco's stock had risen by 13.35%, climbing from $74.36 to $84.29. Yet, over a five-year period, an initial $10,000 investment would have shrunk to $9,146, reflecting an 8.54% decline. Currently, Wall Street analysts maintain a Moderate Buy rating on the stock, with an average target price of $92—nearly 35% above its recent levels. The Jetro deal marks Sysco's largest acquisition to date, aiming to strengthen its wholesale operations and financial performance. While the company projects higher margins and cash flow, the immediate stock drop shows investor caution. The long-term impact will depend on how quickly Sysco integrates Jetro and delivers on its growth promises.
