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Valued at a market cap of $81.1 billion, Cintas Corporation (CTAS) engages in the provision of corporate identity uniforms and related business services. The Cincinnati, Ohio-based company offers a wide range of products, including uniforms, floor care, restroom supplies, first aid and safety products, fire extinguishers, and safety and compliance training.
Shares of this uniform rental company have significantly outperformed the broader market over the past 52 weeks. CTAS has notably rallied nearly 61% over this time frame, while the broader S&P 500 Index ($SPX) has gained 26.9%. In 2024, shares of CTAS are up 32.3%, compared to SPX’s 17.9% gain on a YTD basis.
Zooming in further, CTAS’s outperformance looks even more pronounced when compared to the DWA Industrials Momentum Invesco ETF’s (PRN) 36% gain over the past 52 weeks and 21.2% return on a YTD basis.
CTAS’s outperformance is driven by the company’s strategic acquisitions and constant innovations, which include introducing new products and offering a variety of cross-selling solutions. Moreover, CTAS surged 5.4% on Jul. 18 after its Q4 earnings release. The company reported EPS of $3.99, exceeding the consensus estimate, and showed a significant 19.8% year-over-year increase. Additionally, Cintas' revenues of $2.5 billion met expectations, driven by strong performance in all its segments and a higher-than-expected gross margin.
For the current fiscal year, ending in May 2025, analysts expect CTAS’s EPS to grow 9.8% year over year to $16.64. The company’s earnings surprise history is promising. It beat the consensus estimates in each of the last four quarters.
Among the 19 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on eight “Strong Buy” ratings, nine “Holds,” and two “Strong Sells.”
The configuration is less bullish than three months ago, with nine analysts suggesting a “Strong Buy.”
On Jul. 19, Stifel maintained a “Hold” rating on Cintas Corporation and raised the price target to $798, noting the company's robust operating momentum, which is anticipated to persist through fiscal year 2025 as well.
As of writing, the company is trading above its mean price target of $769.73. The Street-high price target of $875, implies a potential upside of only 9.4% from the current price.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
