Why This Aramark Analyst Is Raising Forecasts After Mixed Q4 Results

Aramark ARMK Monday reported upbeat earnings for its fiscal fourth quarter.

The Philadelphia-based company announced a "material" share repurchase in fiscal 2025, for the first time in nearly eight years, according to Truist Securities.

Analyst Jasper Bibb maintained a Buy rating on Aramark, while raising the price target from $42 to $46.

Aramark Thesis: The company’s total revenues grew by 5% year-on-year to $4.417 billion, missing the consensus of $4.455 billion possibly due to incremental forex headwinds, Bibb said in the note.  

Check out other analyst stock ratings.

"Margin drivers included operating leverage, cost discipline and supply chain efficiencies," and the company reported adjusted earnings of 54 cents per share, ahead of consensus of 52 cents per shares, he added.

Aramark guided to organic growth of around 7.5%-9.5% in constant currency terms, implying full-year revenues in the range of $18.61 billion to $18.96 billion, versus consensus of $18.53 billion, net of a forex headwind of $95 million, the analyst stated.

While management announced the authorization of a share buyback program of $500 million, the earnings guidance "does not include any impact from potential share repurchase activity," Bibb further wrote.

Price Action: Shares of Aramark had declined by 0.62% to $38.44 in premarket trading on Tuesday.

Read More:

• Food Company Aramark Posts Mixed Q4, Increases Dividend By 11% & More

Image: Shutterstock