Aramark's Nexus Business Expected to Contribute 'Significantly' in Fiscal 2027, Morgan Stanley Says

MT Newswires Live08-12

$Aramark(ARMK-W)$'s (ARMK) Nexus is expected to contribute "significantly" in fiscal 2027, with the company now expecting $400 million and $500 million of additional annualized revenue from the business over fiscal 2027 and 2028, Morgan Stanley said in a note emailed Wednesday.

In its fiscal Q3 earnings report, the management raised estimates for the first Nexus contract by 40%, with the company's two contracts now slated to add about $300 million of annualized revenue versus $100 million per site previously, Morgan Stanley said.

Additionally, a second site has begun mobilization and is expected to be operational in the near term. A recent contract with a colocation provider is expected to host 4,500 beds and would equate to about $180 million, with mobilization slated for H1 of 2027, according to the note.

Morgan Stanley further said the management has about eight sites that are signed or under active development in various stages and that the company has attributed its early success to its first-mover advantage.

Morgan Stanley raised its price target on the company's stock to $63 from $55 and maintained its equal-weight rating.

Price: 60.98, Change: +0.51, Percent Change: +0.84

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