Aramark (ARMK, Financial) has successfully secured several new contracts to provide dining services at a range of universities. The institutions benefiting from these agreements include Adams State University, Alvernia University, Azusa Pacific University, Delaware Valley University, East Central University, and the University of North Carolina, Pembroke. These contracts signify a strategic expansion in Aramark's presence in the educational sector, potentially boosting its portfolio and market footprint.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 14 analysts, the average target price for Aramark (ARMK, Financial) is $44.53 with a high estimate of $49.00 and a low estimate of $38.43. The average target implies an upside of 10.88% from the current price of $40.16. More detailed estimate data can be found on the Aramark (ARMK) Forecast page.
Based on the consensus recommendation from 14 brokerage firms, Aramark's (ARMK, Financial) average brokerage recommendation is currently 1.9, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Aramark (ARMK, Financial) in one year is $37.24, suggesting a downside of 7.27% from the current price of $40.16. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Aramark (ARMK) Summary page.
ARMK Key Business Developments
Release Date: May 06, 2025
- Organic Revenue: $4.3 billion, an increase of 3%.
- FSS US Organic Revenue: $3.1 billion, roughly 1% increase.
- International Organic Revenue: $1.3 billion, an increase of 10% year-over-year.
- Adjusted Operating Income (AOI): $205 million, up 11% on a constant currency basis.
- AOI Margin: 4.8%, increased 33 basis points year-over-year.
- US AOI Growth: 5% with a 30 basis point margin improvement.
- International AOI Growth: 26% with more than 60 basis points of margin improvement.
- Adjusted EPS: $0.34, an increase of 22% versus the prior year on a constant currency basis.
- Free Cash Flow: $141 million for the quarter.
- Share Repurchases: Nearly 4 million shares or about $140 million since November.
- Cash Availability: Over $1.6 billion at quarter end.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Aramark (ARMK, Financial) reported a strong client retention rate above 98% in both FSS US and international segments.
- The company experienced a monthly acceleration of revenue growth, with a 6% increase in April.
- New client wins totaled $760 million fiscal year-to-date, providing clear visibility to achieving net new growth of 4% to 5% in fiscal '25.
- International segment reported a 10% year-over-year increase in organic revenue, with strong performance in countries like the UK, Spain, Chile, and Canada.
- Aramark (ARMK) achieved record AOI profitability for any second quarter in global FSS history, with over 20% adjusted EPS growth on a constant currency basis.
Negative Points
- Revenue growth was affected by the exit of some facilities accounts last year and temporary weather-related client site closures in the Southeast US.
- The US segment's organic revenue growth was only 1% in the second quarter, impacted by calendar shifts and weather-related closures.
- Recent US tariff activity introduced uncertainty in market pricing levels and inflation expectations.
- The company faced challenges in the education sector due to fewer operating days caused by a calendar shift.
- Despite strong performance, the company is still managing fluctuations in the marketplace, both on Wall Street and Main Street.
