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UPDATE: JPMorgan Initiates Coverage on Aramark

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In a report published Tuesday, JPMorgan analyst Molly McGarrett initiated coverage on Aramark (NYSE: ARMK) at Overweight, establishing a $28.00 price target.

According to the report, ARMK delivers an attractive mix of accelerated organic revenue growth and a healthy margin expansion trajectory ahead. They are well positioned to benefit from rising outsourcing in North America and globally.

“Aramark is well positioned to benefit from the positive trends in the global outsourcing market,” the report noted. “Aramark's core business is outsourced cafeterias and concessions, as well as facility services (including custodial, plant maintenance, and grounds keeping). The global food/facilities total addressable market is estimated to be ~$900bln with continued shifts towards outsourcing, as clients become more sophisticated with regard to cost management. Aramark is well entrenched in the Education and Healthcare end markets, which are experiencing the best lift in outsourcing. About 80% of Aramark's revenues come from North America, which is the most attractive established geography in our view. Aramark aspires to expanding emerging economies, where food/facilities outsourcing is in the early stages.”

Some highlights from the report included:

-Compelling mix of revenue growth, margin expansion and deleveraging -Economic backdrop and corporate spending are important for Aramark ARMK closed Friday at $24.51.

Latest Ratings for ARMK

Jan 2015Morgan StanleyDowngradesEqual-weight
Dec 2014BarclaysMaintainsOverweight
Nov 2014JP MorganMaintainsOverweight

View More Analyst Ratings for ARMK
View the Latest Analyst Ratings

Posted-In: JPMorgan Molly McGarrettAnalyst Color Initiation Analyst Ratings


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