Aramark
Thesis
We believe that Aramark's core operations are undervalued and can see significant EPS enhancement through operational improvements and potential spinoff of its Uniform business. Our base case price target of $58 represents a 23% IRR, based on conservative growth and margin expansion assumptions, while a bear case of $25 assumes no growth and a lower multiple.
Did it work?
The long call was directionally right: Aramark returned +87.2% over the ~7.3 years, and the thesis's central catalyst — separating the Uniform business — ultimately materialized (the Vestis spinoff in 2023), alongside real operational/margin improvement. However, +87.2% over 88 months is only about 9% annualized, far below the stated 23% IRR base case, and the $58 target appears not to have been reached or sustained (the stock's pre-spin peak was in the mid-$50s). The thesis played out directionally and catalytically, but missed its own base-case return economics.