Aramark's Surge Necessitates A Prudent Downgrade

Aramark delivered strong Q3 results, with revenue and adjusted EPS exceeding analyst expectations and robust growth across both U.S. and international segments. ARMK forecasts full-year organic revenue growth of 9–10% and adjusted EPS growth of 20–25%, driven by new business wins and sector expansion. The launch of Aramark Nexus targets hyperscale AI data centers and large industrial projects, with initial contracts and expansion underway. After a 52% stock rally since March, valuation is no longer compelling; I downgrade ARMK to 'hold' as the easy upside appears realized.

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Back in late March of this year, I told investors that the growth story for Aramark (ARMK) was not over just yet.