RBC Capital Markets has upgraded Aramark Holdings to its top pick within the U.S. business services sector, citing sustained commercial momentum and broad-based growth across operations.
The firm raised Aramark’s price target to $70 from $60, implying a mid-teen total shareholder return potential. The new target suggests a calendar 2027 price-to-earnings multiple of roughly 24 times, which RBC described as undemanding relative to peers in the sector.
Earnings estimates were also revised higher, with fiscal 2026 EPS lifted by 2%, fiscal 2027 by 7%, and fiscal 2028 by 10%. The adjustments reflect stronger top-line performance and a lower effective tax rate, according to the bank.
Aramark reported underlying organic sales growth of 10% to 11% in the third quarter, with similar growth expected in the fourth quarter. The company attributed the performance to broad-based gains across industry verticals and geographies, alongside strong commercial wins and high contract retention rates in core activities.
RBC highlighted the potential for operating income margin expansion, driven by above-average margins on Nexus contracts and operating leverage over selling, general, and administrative expenses. The bank’s upgrade follows Aramark’s third-quarter results and updated financial model.
