Morgan Stanley has increased its price target on Aramark Holdings (NYSE: ARMK) to $45.00 from $44.00, while maintaining an Equalweight rating on the stock. The revised target is close to InvestingPro's Fair Value assessment and implies the company could be modestly undervalued relative to its then-current market price of $40.96.
The bank's adjustment follows Aramark's reported 5.0% organic revenue growth, a rate Morgan Stanley says exceeded expectations. That result continues a broader top-line expansion for the food service company, which recorded 6.35% revenue growth over the past twelve months and produced $18.5 billion in total revenue during that span.
Morgan Stanley pointed to segment-level strength as the primary driver of the outperformance. The firm specifically cited continued momentum in Aramark's International operations and in its FSS US Business & Industry segment, noting these areas led the revenue upside.
Beyond revenue, the bank highlighted key performance indicators that it views as constructive for Aramark's business model. High retention rates among existing clients and an acceleration in new business wins were singled out as positive operational signals supporting the firms view.
Separately, Aramark reported fiscal first-quarter 2026 results that beat analysts' expectations. The company delivered adjusted earnings per share of $0.51 versus a consensus forecast of $0.50, and generated $4.83 billion in revenue compared with the projected $4.74 billion. Those outcomes point to a quarter that was stronger than anticipated on both the top and bottom lines.
Despite the earnings and revenue beats, Aramark's stock traded lower in pre-market action, slipping 2.45%. That decline suggests investor response to the quarter and related announcements was mixed, even as operational metrics and analyst targets were nudged higher.
Taken together, the analyst update and the quarterly report present a picture of a company with improving revenue dynamics and solid client metrics, while market reactions reflect lingering uncertainty about the near-term outlook.
Summary
Morgan Stanley raised Aramark's price target to $45 from $44 and kept an Equalweight rating after the company posted organic revenue growth of 5.0% and highlighted strong client retention and accelerating new business. Fiscal Q1 2026 results beat expectations on both adjusted EPS and revenue, yet the stock fell 2.45% in pre-market trading, indicating mixed investor sentiment.