Aramark stock price target maintained at $44 by UBS on growth outlook

Investing.com - UBS has reiterated its Buy rating and $44.00 price target on Aramark Holdings (NYSE:ARMK) ahead of the company’s fiscal third-quarter results. The stock, currently trading at $42.98, sits near its 52-week high of $43.25 and has delivered an impressive 34.2% return over the past year.

The investment firm expects Aramark to deliver results largely in line with expectations for the quarter, with consensus estimates projecting 6.5% organic growth and approximately 50 basis points of year-over-year adjusted operating income margin expansion. According to InvestingPro data, the company’s current gross profit margin stands at 15.58%, suggesting room for improvement in operational efficiency.

UBS views the upcoming quarter as a "stepping stone" toward a stronger fiscal fourth quarter, which has become the primary focus for investors watching the food service and facilities management company. With an EV/EBITDA multiple of 14.08x and trading near Fair Value based on InvestingPro analysis, investors should monitor the company’s execution carefully. Get access to 8 more exclusive ProTips and comprehensive valuation metrics with an InvestingPro subscription.

The firm highlighted Aramark’s projected 8%+ organic growth run-rate expected by the end of the fiscal year, which could potentially provide modest upside to fiscal 2026 organic growth estimates, currently set at approximately 7% excluding calendar effects.

Despite Aramark’s valuation discount versus competitor Compass narrowing in recent months, UBS noted the company still trades at approximately 2X EBITDA discount and believes positive momentum can continue if stronger growth rates are maintained.

In other recent news, Aramark Holdings reported its second-quarter earnings for 2025, showing a slight beat on earnings per share (EPS) but a miss on revenue. The company posted an EPS of $0.34, exceeding forecasts of $0.33, while its revenue came in at $4.28 billion, falling short of the anticipated $4.36 billion. Despite the revenue miss, Aramark’s strong performance in operating income and adjusted EPS has reinforced investor confidence. RBC Capital Markets maintained an Outperform rating on Aramark, highlighting the company’s robust adjusted operating income growth and international expansion prospects. Citi also raised its price target for Aramark shares to $46.50, emphasizing the company’s margin improvement and high retention rate of approximately 98%. Additionally, Aramark expanded its reach in the higher education sector by securing new dining service contracts with six universities across the United States. These developments reflect Aramark’s ongoing strategic initiatives to enhance its market position and drive growth.

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