Sysco Price Target Slashed by Piper Sandler After Surprise $29.1 Billion Restaurant Depot Acquisition

Sysco Corporation (NYSE:SYY | SYY Price Prediction) stock took a hit when the company announced a $29.1 billion deal to acquire Restaurant Depot on March 30. The market didn’t love it, and Wall Street analysts are starting to weigh in. Piper Sandler is among the first to formally revise its outlook, and the firm isn’t holding back.

Piper Sandler lowered its price target on Sysco stock to $77 from $83 while keeping a Neutral rating on the shares. The firm said it was “quite surprised” by the announcement, signaling this deal caught even seasoned observers off guard.

The Analyst’s Case

Piper Sandler isn’t a fan of this transaction. The firm noted that this view appears to align with the broader market’s reaction, given the sharp sell-off in Sysco stock following the announcement.

Piper Sandler thinks the market reaction was fairly rational and wouldn’t be a buyer on this pullback. That’s a pointed statement for a firm maintaining a Neutral rating rather than stepping to an outright downgrade.

Why the Market Reacted So Sharply

The concern here is straightforward: size and debt. Sysco plans to take on $21 billion in new debt, pushing net leverage to around 4.5x at closing. That’s a significant jump for a company with a current market cap of $35.02 billion.

Sysco shares fell roughly 8% premarket on the announcement and are now down 13.5% over the past month. The share repurchase program has also been paused to prioritize de-leveraging, removing a key source of shareholder returns in the near term.

Company Snapshot

Sysco is the world’s largest food-service distribution company, operating 337 distribution centers across 10 countries and serving roughly 730,000 customer locations. The company posted full-year FY2025 revenue of $81.37 billion and has reaffirmed its FY2026 guidance for sales growth of 3% to 5%.

Restaurant Depot operates 166 stores across 35 states and serves over 725,000 independent restaurants. The combined entity would approach $100 billion in annual revenues and serve 1.455 million customer locations.

What It Means for Your Portfolio

Granted, there’s a bull case here. Sysco management projects mid-to-high single-digit EPS accretion in year one and low-to-mid-teens accretion in year two, alongside $250 million in annualized net cost synergies within three years. Morningstar has said it believes the market may be overreacting to the deal.

That said, Piper Sandler’s caution is hard to dismiss. Investors watching Sysco stock should keep an eye on the Q3 FY2026 earnings release scheduled for April 28, where management will likely face pointed questions about integration plans, the recent CIO departure, and the pace of de-leveraging.