On Wednesday, Truist Securities updated its outlook on ARAMARK Holdings (NYSE:ARMK), raising the price target to $37 from $35 and maintaining a Buy rating on the stock. The firm's analysis followed investor meetings in Chicago with Aramark's CEO John Zillmer and Head of Investor Relations Felise Kissell.
The discussions with Aramark's leadership highlighted several positive factors influencing the company's outlook. Among these were the continued high levels of outsourcing activity, contributing to a strong sales pipeline. Furthermore, the company's financial year 2024 organic growth guidance of approximately 8% was deemed conservative by Truist, especially considering it includes minimal assumed base growth.
Truist also pointed out that Aramark's decreasing leverage could potentially allow the company to shift towards capital deployment in the early part of FY25. This financial maneuvering is expected to support margin expansion, especially as the company aligns price and cost inflation, which was a key focus in the first quarter.
Aramark, a leading entity in the Facility Services sector, has been identified by Truist as a top pick within the industry. The revised price target of $37 reflects a 9.8 times multiple of the company's projected CY25E EBITDA, signaling confidence in Aramark's future financial performance.
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