Earnings Miss: Aramark Missed EPS By 19% And Analysts Are Revising Their Forecasts

Aramark (NYSE:ARMK) shareholders are probably feeling a little disappointed, since its shares fell 4.6% to US$36.73 in the week after its latest full-year results. It was not a great result overall. While revenues of US$19b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 19% to hit US$1.22 per share. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Aramark after the latest results.

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After the latest results, the 15 analysts covering Aramark are now predicting revenues of US$19.7b in 2026. If met, this would reflect a satisfactory 6.4% improvement in revenue compared to the last 12 months. Per-share earnings are expected to leap 58% to US$1.97. In the lead-up to this report, the analysts had been modelling revenues of US$19.7b and earnings per share (EPS) of US$2.01 in 2026. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

See our latest analysis for Aramark

The consensus price target held steady at US$44.60, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Aramark at US$49.00 per share, while the most bearish prices it at US$34.00. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Aramark's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 6.4% growth on an annualised basis. This is compared to a historical growth rate of 9.8% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 10% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Aramark.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Aramark's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$44.60, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Aramark going out to 2028, and you can see them free on our platform here..

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.