Stifel raised its price target on Aramark Holdings (NYSE: ARMK) to $47.00 from $44.00 on Wednesday, while retaining a Buy rating on the provider of food service and facilities management services. The firm characterized Aramark's most recent quarter as "solid," citing continued contracting strength and retention rates at historical highs.
In updating its outlook, Stifel said it implemented only modest changes to its financial model and left its fiscal year 2026 and 2027 earnings per share estimates effectively unchanged. The higher price target reflects Stifel's decision to include calendar year 2027 estimates in its valuation framework, applying an 11x enterprise value to EBITDA multiple to its calendar year 2026 and 2027 estimates.
Stifel also noted positive business momentum at Aramark and said it expects the favorable performance to continue. The firm emphasized contracting and retention metrics as key drivers in its assessment, while keeping near-term EPS forecasts stable.
Aramark recently reported fiscal first-quarter 2026 results that topped analysts' expectations. The company recorded adjusted earnings per share of $0.51, compared with the $0.50 analysts had forecast. Revenue for the quarter reached $4.83 billion, exceeding the anticipated $4.74 billion. Those results were highlighted as evidence of a positive financial performance for the quarter.
Separately, Morgan Stanley raised its price target on Aramark to $45 from $44, while maintaining an Equalweight rating on the stock. That adjustment followed the company's reported organic revenue growth of 5.0 percent, which Morgan Stanley said surpassed estimates.
Market reaction was mixed. The stock showed a pre-market decline despite the earnings beat and the analyst target increases, suggesting divergent investor responses to the quarter and the analyst commentary.
Key takeaways from the analyst updates and results include continued strength in contracting and retention as cited by Stifel, an unchanged near-term EPS outlook from Stifel despite the quarter's strength, and corroborating action by Morgan Stanley in raising its target following stronger-than-expected organic revenue growth.
While Stifel's valuation change incorporates an additional calendar year in its model and applies an 11x EV/EBITDA multiple to two calendar years of estimates, the firm did not materially alter its EPS trajectory for fiscal 2026 and 2027 in the update.
Investors weighing Aramark's outlook can consider the beat in both EPS and revenue for fiscal Q1 2026, the analyst target adjustments from two firms, and the mixed initial market response reflected in pre-market trading.