William Blair analyst Tim Mulrooney upgraded Vestis Corp (NYSE: VSTS) from Market Perform to Outperform.

The analyst comments "Stock Thoughts. There was no shortage of good news in the quarter, with a second-quarter beat on the top and bottom line, a full-year outlook raise that was above the beat, and improving KPIs that are giving incremental momentum to the turnaround story. Management was confident that the fourth quarter would mark an inflection into positive organic growth territory. Since new management took over almost one year ago, the company has been focused on correcting what it can control. This included pruning lower-margin business, stemming the retention decline in business it wanted to keep, and focusing aggressively on improving core operations at the branch and corporate levels. For the first time since the IPO, these improvements have led to a decline in cost per pound and revenue per pound flattening out. As management has executed on what it said it would, we are more confident in its ability to execute on the next and more difficult phase, returning the business to positive and profitable organic growth. We expand further on these points in our note, including potential opportunities stemming from a Cintas/UniFirst merger. As a result, we are changing our rating to Outperform."

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Shares of Vestis Corp closed at $12.00 yesterday.