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Investing.com - Baird has upgraded Aramark Holdings (NYSE:ARMK) from Neutral to Outperform and raised its price target to $47.00 from $43.00 following the company’s fiscal third-quarter 2025 report. The stock, which has seen an 8.43% decline over the past week, currently trades near InvestingPro’s Fair Value estimate.
The upgrade comes after Aramark’s quarterly results reset market expectations lower when revenue momentum failed to build confidence in the company’s guidance targets, creating what Baird describes as a "longer-term opportunity."
Baird appears less concerned about Aramark’s revenue trajectory, suggesting expectations will likely move to the lower end of guidance but remain achievable based on key performance indicators including increasing retention rates, strong new sales, and consistent margin improvements.
The research firm expects these factors to drive high-teens percentage earnings per share growth for Aramark, while noting that reduced leverage and increased share buybacks should follow.
Baird categorized Aramark as a "GARP, compounder/grinder" investment opportunity, indicating it finds the stock attractive at approximately $40 per share.
In other recent news, Aramark Holdings reported its third-quarter earnings for 2025, meeting expectations for earnings per share (EPS) but falling short on revenue forecasts. The company achieved an EPS of $0.40, aligning with projections, while revenue reached $4.63 billion, slightly below the anticipated $4.66 billion. This revenue miss marked the second consecutive quarter of organic growth shortfalls for Aramark. Despite this, UBS raised its price target for Aramark to $46.00 from $44.00, maintaining a Buy rating on the stock. UBS anticipates growth for the company, which influenced the decision to increase the price target. These developments come as Aramark continues to navigate challenges in organic growth. The company’s recent earnings report and analyst actions reflect ongoing investor interest and scrutiny.
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