Aramark (NYSE:ARMK) Shares Gap Down - Here's Why

Key Points

• Aramark (NYSE:ARMK) shares gapped down from a previous close of $43.11 to open at $39.72 before trading at $40.16.
• Analysts have set a consensus price target of $43.91 for Aramark, with ten analysts rating it as a "buy" and two as "hold".
• The company declared a quarterly dividend of $0.105 per share, resulting in an annualized dividend yield of 1.0%.

Shares of Aramark (NYSE:ARMK - Get Free Report) gapped down before the market opened on Tuesday . The stock had previously closed at $43.11, but opened at $39.72. Aramark shares last traded at $40.16, with a volume of 588,301 shares trading hands.

Analyst Ratings Changes

Several equities research analysts recently issued reports on ARMK shares. Morgan Stanley increased their target price on shares of Aramark from $42.00 to $44.00 and gave the stock an "equal weight" rating in a report on Monday, June 30th. Royal Bank Of Canada reissued an "outperform" rating and issued a $47.00 price objective on shares of Aramark in a research note on Wednesday, May 14th. UBS Group upped their target price on shares of Aramark from $44.00 to $46.00 and gave the stock a "buy" rating in a report on Wednesday. Robert W. Baird raised Aramark from a "neutral" rating to an "outperform" rating and raised their price target for the company from $43.00 to $47.00 in a report on Wednesday. Finally, Baird R W raised Aramark from a "hold" rating to a "strong-buy" rating in a research note on Wednesday. One analyst has rated the stock with a hold rating, eleven have assigned a buy rating and one has issued a strong buy rating to the company's stock. According to data from MarketBeat.com, the stock currently has an average rating of "Buy" and an average price target of $44.27.

Aramark Stock Performance

The stock has a market cap of $10.24 billion, a P/E ratio of 28.96 and a beta of 1.33. The company has a quick ratio of 1.08, a current ratio of 1.29 and a debt-to-equity ratio of 2.03. The business has a 50 day moving average price of $41.75 and a 200 day moving average price of $37.99.

Aramark (NYSE:ARMK - Get Free Report) last posted its quarterly earnings results on Tuesday, August 5th. The company reported $0.40 earnings per share (EPS) for the quarter, hitting analysts' consensus estimates of $0.40. The company had revenue of $4.63 billion during the quarter, compared to analyst estimates of $4.66 billion. Aramark had a net margin of 2.02% and a return on equity of 15.67%. Aramark's revenue for the quarter was up 5.7% compared to the same quarter last year. During the same period last year, the firm posted $0.31 EPS. As a group, sell-side analysts expect that Aramark will post 1.92 EPS for the current year.

Aramark Dividend Announcement

The business also recently disclosed a quarterly dividend, which will be paid on Wednesday, August 20th. Shareholders of record on Wednesday, August 6th will be paid a dividend of $0.105 per share. This represents a $0.42 dividend on an annualized basis and a yield of 1.1%. Aramark's dividend payout ratio (DPR) is currently 32.31%.

Institutional Trading of Aramark

A number of hedge funds and other institutional investors have recently modified their holdings of the stock. Massachusetts Financial Services Co. MA increased its stake in Aramark by 29.5% during the 1st quarter. Massachusetts Financial Services Co. MA now owns 17,605,896 shares of the company's stock worth $607,756,000 after buying an additional 4,012,162 shares during the period. Fiduciary Management Inc. WI increased its stake in Aramark by 13.8% in the first quarter. Fiduciary Management Inc. WI now owns 13,037,630 shares of the company's stock valued at $450,059,000 after purchasing an additional 1,582,890 shares during the period. PointState Capital LP raised its stake in shares of Aramark by 135.4% during the fourth quarter. PointState Capital LP now owns 2,690,617 shares of the company's stock worth $100,387,000 after purchasing an additional 1,547,792 shares during the last quarter. Junto Capital Management LP acquired a new stake in Aramark in the first quarter valued at about $46,499,000. Finally, Nuveen LLC purchased a new stake in shares of Aramark during the 1st quarter worth $37,476,000.

Aramark Company Profile

Aramark provides food and facilities services to education, healthcare, business and industry, sports, leisure, and corrections clients in the United States and internationally. It operates through two segments, Food and Support Services United States, and Food and Support Services International. The company offers food-related managed services, including dining, catering, food service management, and convenience-oriented retail services; non-clinical food and food-related support services, such as patient food and nutrition, retail food, environmental services, and procurement services; and plant operations and maintenance, custodial/housekeeping, energy management, grounds keeping, and capital project management services.