ARMK - Embedded Expectations Analysis - 2021 06 15
Aramark (ARMK:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 31.4x Uniform P/E, implying somewhat bullish expectations for the firm. Given management's confidence about growth investment benefits, Uniform segment demand, and university reopenings, market expectations are still too pessimistic, and equity outperformance is likely warrantedSpecifically, management is confident the long-term benefits of their growth investments are becoming evident, their value-enhancing initiatives for the Uniform segment led to record-high customer satisfaction scores, and that the Uniform segment is seeing additional demand for adjacent services offerings. Additionally, they are confident the facilities services business is seeing high levels of activity, their supply chain management is providing the best economics and access to innovative products, and that there will be a robust fall season as virtually all universities operate on-site
Given management's confidence about growth investments, Uniform segment demand, and university reopenings, market expectations are too pessimistic, and equity outperformance is likely warranted
Aramark is a provider of food, facilities and uniform services. The company manages its Food and Support Services (FSS) business in segments split between its United States and International operations. The company's FSS segments manage a number of interrelated services-including food, hospitality, procurement and facility services-for school districts, colleges and universities, healthcare facilities, businesses, sports, entertainment and recreational venues, conference and convention centers, national and state parks and correctional institutions. The company's Uniform and Career Apparel segment provides employee uniform solution, including design, sourcing and manufacturing, delivery, cleaning and maintenance.
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