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Investing.com - UBS reiterated its Buy rating and $45.00 price target on Aramark Holdings (NYSE:ARMK), aligning with broader analyst sentiment that shows an average target of $49 on the high end. According to InvestingPro data, the stock is currently trading at $39.18 and appears slightly undervalued based on Fair Value analysis.
Aramark-operated stadiums hosted only two home playoff games this season, both for the Philadelphia Phillies, compared to 11 home playoff games last year across the Phillies, Mets, Royals, and Astros stadiums.
With the elimination of the Phillies and the Boston Red Sox (which did not host a home playoff game), there are no remaining MLB playoff games in Aramark-operated stadiums this year.
UBS estimates that with approximately $40 spent per fan on concessions, Aramark could face a year-over-year revenue headwind of around $15 million, potentially impacting FQ1-26 (December quarter) organic growth by approximately 30-40 basis points.
While this revenue impact likely does not materially affect full-year fiscal 2026 guidance, UBS suggests management might flag a softer start to the year due to this factor and the timing of the University of Pennsylvania contract win.
In other recent news, Aramark announced a significant contract win with the University of Pennsylvania Health System, which UBS highlighted by maintaining a Buy rating and a $45.00 price target for the company. Despite this positive development, UBS noted potential impacts from bonus expenses and startup costs related to the new service agreement. Meanwhile, Aramark has invested in RoboEatz Autonomous Robotic Kitchen technology to enhance meal services for healthcare workers, indicating a strategic push towards innovation. UBS also lowered its price target for Aramark to $45.00 from $46.00, citing a challenging outlook for the upcoming fourth-quarter earnings report, while maintaining a Buy rating. Stifel reiterated its Buy rating with a $49.00 price target, expressing confidence in Aramark’s ability to achieve 5% to 8% annual organic topline growth. Additionally, Aramark has refinanced $730 million in term loans, extending the maturity to April 2028, as part of its financial restructuring efforts. This refinancing was facilitated through an amendment to its existing credit agreement with JPMorgan Chase Bank and other financial institutions.
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