Aramark investors should forget their home town team this baseball playoff season and as an alternative root for those clubs which have the corporate’s concession stands at their stadiums, based on Bank of America. Major League Baseball’s playoffs, which begin Friday afternoon, have been expanded to incorporate 12 teams, up from 10 last 12 months. In consequence, the utmost variety of potential games for the 2022 playoffs is 53, in comparison with 43 last 12 months, BofA analyst Heather Balsky wrote in a note Friday. Of those 12 teams within the playoffs, Aramark provides food and beverage services for 4: the Houston Astros, Toronto Blue Jays, Philadelphia Phillies and Recent York Mets. “Based on 2022’s seeding, the corporate stands to cater between 6 to 33 playoff games (vs. 14 last 12 months). Our greatest-case scenario for its revenues could be a deep run by the Houston Astros and Recent York Mets,” she said. Balsky assumes all games will sell out and average spending will reach $30 per capita. “Notably, Aramark management has indicated that sports fans in 2022 have been spending more [year over year] and we also know that the corporate has raised prices,” Balsky said. The optimal scenario is that every one 33 games are hosted at stadiums where Aramark is a vendor. If that happens, Aramark’s sales could grow by 65 basis points (0.65 of a percentage point) and its earnings-per-share growth may gain advantage by 290 basis points. The bear case is that the Astros, Blue Jays, Phillies and Mets all lose quickly, with Aramark hosting a bare minimum of six games. In that case, Aramark could face 25 basis points headwinds on sales and 100 basis points headwinds on EPS growth, based on Bank of America. Bank of America is bullish on Aramark in any case, noting that it continues to be recovering from the disruptions brought on by the Covid pandemic. Its price goal of $44 per share implies 29% upside from Thursday’s close. — CNBC’s Michael Bloom contributed reporting.
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