Aramark investors should forget their home town team this baseball playoff season and instead root for those clubs that have the company’s concession stands at their stadiums, according to Bank of America. Major League Baseball’s playoffs, which begin Friday afternoon, have been expanded to include 12 teams, up from 10 last year. As a result, the maximum number of potential games for the 2022 playoffs is 53, compared to 43 last year, BofA analyst Heather Balsky wrote in a note Friday. Of those 12 teams in the playoffs, Aramark provides food and beverage services for four: the Houston Astros, Toronto Blue Jays, Philadelphia Phillies and New York Mets. “Based on 2022’s seeding, the company stands to cater between 6 to 33 playoff games (vs. 14 last year). Our best-case scenario for its revenues would be a deep run by the Houston Astros and New 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 company has raised prices,” Balsky said. The optimal scenario is that all 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 could benefit 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, according to Bank of America. Bank of America is bullish on Aramark in any case, noting that it is still recovering from the disruptions brought on by the Covid pandemic. Its price target of $44 per share implies 29% upside from Thursday’s close. — CNBC’s Michael Bloom contributed reporting.
