Stifel starts Aramark spinoff Vestis with a Buy

As previously reported, Stifel initiated coverage of Vestis (VSTS) with a Buy rating and $20 price target. The spinoff of Aramark (ARMK) is the second-largest provider of uniform rentals and workplace supplies across the U.S. and Canada as well as “a turnaround story,” the analyst tells investors. As a division of Aramark, Vestis was under-invested in and underperformed the financial metrics of the peer group, but the firm believes there are ample levers to improve the operations of the business and contends that management “should have the know-how to implement those improvements,” adding that it “can see a pathway to a $41 stock price.”