Analyst Shlomo Rosenbaum of Stifel Nicolaus maintained a Buy rating on ARAMARK Holdings, reducing the price target to $44.00.
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Shlomo Rosenbaum has given his Buy rating due to a combination of factors including the strong underlying business momentum of ARAMARK Holdings, despite recent client-driven timing delays in new contract starts. These delays have temporarily impacted revenue and earnings, but the company is expected to recover as these contracts begin contributing to revenue in FY26.
Additionally, the new business pipeline remains robust, with first-time outsourcing playing a significant role. The company’s retention rate is expected to remain high, with management considering 95% as the minimum benchmark. The anticipated start of the University of Pennsylvania Health System contract in February 2026 is also a positive indicator, despite its longer timeframe to reach profitability. Overall, the expected revenue growth pattern and margin expansion, along with declining leverage, support the Buy rating as ARAMARK’s valuation gap with competitors is projected to narrow.