Aramark (ARMK) Stock Forecast & Price Target

Aramark reported a year-over-year EPS increase of 14% to $0.54, slightly surpassing consensus expectations, while total revenues rose 5% year-over-year to $4.417 billion, reflecting a strong organic constant currency growth of 7%. The food and support services segment in the United States experienced a 4% increase, primarily driven by organic growth, and the company expects to achieve 5%-7% organic top-line growth in the near term due to sustained new business wins and improving pricing dynamics. Furthermore, Aramark reiterated its fiscal year 2025 guidance, which has led to a minor upward revision of EPS estimates for both FY25 and FY26, indicating continued confidence in the company's financial trajectory.

Aramark's recent financial performance reflects a mixed quarter, with revenue showing a "miss" attributed to incremental foreign exchange headwinds estimated at approximately $72 million year-over-year. Significant risks impacting the company's outlook include longer-than-anticipated inflationary pressures on food costs, disappointing margin performance, and the sustainability of its decremental margin framework during a potential macroeconomic downturn. Additionally, weakened consumer spending in sensitive sectors and operational issues are raising concerns about the company's ability to achieve its long-term financial goals and de-leveraging targets.