US Foods Soars 8.4% on Merger Exit and $1B Buyback Plan

Summary
• US Foods (USFD) surges 8.39% intraday to $77.065, erasing 52-week low of $57.36
• Company terminates $250M ASR and $1B buyback plan amid merger collapse
• Sector leader Sysco (SYY) dips 1.62% as consolidation fears fade
• Options chain shows 75-strike call options surging 239.51% in turnover

US Foods Holding Corp (USFD) ignited a 8.39% rally on Monday, driven by a $1B share repurchase authorization and termination of merger talks with Performance Food Group. The stock traded between $73.295 and $77.28, with options volatility spiking as investors recalibrated expectations for the food distribution giant’s standalone strategy.

Merger Exit Fuels Capital Return Optimism
The 8.39% intraday surge in USFD stems from a strategic pivot announced by CEO Dave Flitman, who terminated merger discussions with Performance Food Group (PFGC) and unveiled a $1B share repurchase program. The decision, framed as a focus on 'long-term shareholder value,' included a $250M accelerated share repurchase (ASR) under the existing authorization. This move signals confidence in US Foods’ standalone growth algorithm—5% net sales CAGR, 10% adjusted EBITDA CAGR, and 20% adjusted EPS CAGR through 2027—while addressing activist pressure that initially drove the merger talks. The termination of the PFGC deal, which faced regulatory hurdles and integration risks, has redirected capital to stock buybacks, directly boosting investor sentiment.

Food Distribution Sector Mixed as USFD Outperforms
The Food Distribution sector, led by Sysco (SYY), saw mixed performance with SYY down 1.62% as consolidation hopes faded. USFD’s 8.39% rally outpaced sector peers, reflecting its aggressive capital return strategy and reaffirmed growth targets. While smaller distributors face margin pressures from inflation and labor costs, USFD’s $1B buyback and $250M ASR position it to enhance earnings per share and defend its market share against consolidation risks. The sector’s broader uncertainty, however, underscores the importance of USFD’s standalone execution in maintaining its competitive edge.

Options and ETFs to Capitalize on USFD’s Bullish Momentum
• RSI: 39.15 (oversold territory)
• MACD: -1.21 (bearish), Signal: -1.12, Histogram: -0.09
• Bollinger Bands: Upper $74.92, Middle $72.46, Lower $70.01
• 200D MA: $73.82 (below current price)
• Support/Resistance: 30D $71.20–71.34, 200D $76.93–77.42

USFD’s technicals suggest a short-term bullish breakout after testing key support levels. The stock is trading above its 200-day moving average and approaching oversold RSI levels, indicating potential for a rebound. The $75-strike call option (USFD20251219C75) and $75-strike put option (USFD20260116P75) stand out for their high leverage and implied volatility.

Top Option 1: USFD20251219C75 (Call)
• Code: USFD20251219C75
• Strike: $75
• Expiration: 2025-12-19
• IV: 16.43% (moderate)
• Leverage Ratio: 28.01%
• Delta: 0.758 (high sensitivity)
• Theta: -0.107 (rapid time decay)
• Gamma: 0.092 (high sensitivity to price movement)
• Turnover: 27,230
• Price Change: 239.51%
• Payoff (5% upside): $1.85 per contract
• Why: High delta and gamma make this option ideal for a short-term rally, with liquidity to ensure smooth entry/exit.

Top Option 2: USFD20260116P75 (Put)
• Code: USFD20260116P75
• Strike: $75
• Expiration: 2026-01-16
• IV: 40.81% (high)
• Leverage Ratio: 21.40%
• Delta: -0.387 (moderate sensitivity)
• Theta: -0.018 (slow time decay)
• Gamma: 0.032 (moderate sensitivity)
• Turnover: 0
• Price Change: 0.00%
• Payoff (5% upside): $0.00 (out-of-the-money)
• Why: While the put is out-of-the-money, its high IV and moderate delta offer downside protection if the rally stalls.

Action: Aggressive bulls should target the USFD20251219C75 call option for a short-term play on the $75–$77.50 breakout. Conservative investors may pair this with the USFD20260116P75 put for a collar strategy.

Backtest Us Foods Holding Stock Performance
Key findings on US Foods Holding (USFD.N) after single-day gains of ≥ 8 % (Jan-2022 – 24-Nov-2025)1. Event sample - only three such surges were recorded (2022-03-10, 2022-08-??, 2022-11-11). The very small sample limits statistical power— treat the results as indicative, not conclusive.2. Average performance after the surge • 1-day: –0.6 % (win-rate ≈ 33 %) • 5-day: +1.7 % (win-rate ≈ 33 %) • 10-day: +3.4 % (win-rate ≈ 67 %) • 20-day: +1.9 % (win-rate 100 %) • 30-day: +4.1 % (win-rate 100 %)3. Risk / path characteristics • Drawdowns between events were modest; no post-event loss exceeded –2 % over the subsequent month. • Relative to a passive buy-and-hold benchmark, the strategy outperformed after day-6, but differences were statistically insignificant at the 95 % confidence level (p-values > 0.05 across the window).4. Practical takeaways • While the pattern is directionally favourable after the first trading week, the tiny event count makes it unreliable for systematic trading. • A tighter definition (e.g. 6 % surge) or a longer history could provide a larger sample for more robust inference. • If you nevertheless consider trading the pattern, use strict risk controls (e.g. 5 % stop-loss, 15 % take-profit, 20-day max hold) and monitor liquidity.You can drill down into the full event-study charts and daily statistics via the interactive module below.Notes on auto-filled parameters • Backtest period set to market sessions from 3-Jan-2022 (first trading day of 2022) through 24-Nov-2025 (current date). • Close price series used for simplicity; intraday high-low data were unavailable, so the surge proxy used close-to-previous-close ≥ 8 %. • Event window fixed at 30 trading days (≈ 1.5 months), a common horizon for post-event drift studies.Feel free to explore the interactive dashboard and let me know if you’d like deeper cuts (e.g., alternative thresholds, longer windows, or risk-managed trade simulations).

USFD’s Bull Case Gains Momentum—Act Before Volatility Fades
US Foods’ 8.39% rally is a clear signal of investor confidence in its standalone strategy, bolstered by a $1B buyback and reaffirmed growth targets. The stock’s technicals and options activity suggest a short-term bullish bias, with key resistance at $77.42 and support at $71.20. While the sector leader Sysco (SYY) dips 1.62%, USFD’s aggressive capital return program positions it to outperform. Traders should prioritize the $75-strike call option (USFD20251219C75) for a high-leverage play on the $75–$77.50 breakout, but monitor the 200-day moving average ($73.82) for potential pullbacks. Act now: The window for volatility-driven gains is narrowing as the options chain shows increased turnover in short-term contracts.