$Aramark(ARMK-W)$ (ARMK) is expected to deliver a relatively constructive fiscal Q2 update, with modest upside from steady demand and improving margins, UBS Securities said in a note on Wednesday.

The investment firm forecasts Q2 revenue of about 11.5%, slightly above Street expectations. This reflects 10.1% organic growth and a 1.4% foreign exchange tailwind. Adjusted operating income is also expected modestly ahead of consensus, supported by stable margins and a favorable mix from education revenue.

UBS expects Aramark to reiterate its 2026 guidance amid stronger quarterly trends could support confidence toward the midpoint of the company's full-year targets. The brokerage also highlighted datacenter-related contracts tied to hyperscaler buildouts as a potential multi-year growth driver.

The firm said Street expectations for fiscal 2027 revenue growth of about 6.2% may prove conservative if Aramark continues to secure strong net new business.

UBS maintained its buy rating on the stock and raised its price target to $48 from $47.

Shares of Aramark were up 3.5% in Wednesday trading.

Price: 43.47, Change: +1.47, Percent Change: +3.50