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Cincinnati, Ohio-based Cintas Corporation (CTAS) provides corporate identity uniforms and related business services. With a market cap of $82.8 billion, the company sells uniforms and work apparel, as well as entrance mats, restroom supplies, promotional products, document management, fire protection, and first aid and safety services.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and CTAS perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the specialty business services industry. CTAS’ growth is fueled by its ability to expand its customer base and enhance its service offerings through strategic acquisitions. Its operational excellence is evident in the improved cost efficiency of uniform rental and facility services, driving profitability and providing room for investment in further growth initiatives.
Despite its notable strength, CTAS slipped 12.1% from its 52-week high of $228.12, achieved on Nov. 26, 2024. Over the past three months, CTAS stock declined 10.3%, underperforming the S&P 500 Index’s ($SPX) 5.8% dip during the same time frame.
In the longer term, shares of CTAS rose 9.8% on a YTD basis and climbed 28.2% over the past 52 weeks, outperforming SPX’s YTD losses of 2.4% and 12.4% returns over the last year.
To confirm the bullish trend, CTAS is trading above its 50-day moving average since early February. The stock has been trading above its 200-day moving average over the past year, with slight fluctuations.
Cintas' strong performance is fueled by its focus on technology and automation, as well as strategic acquisitions. The company is benefitting from increased demand in its Uniform Rental, Facility Services, and First Aid and Safety Services segments. Investments in SmartTruck technology, garment-sharing technology, and partnerships with Verizon Communications Inc. (VZ) and Alphabet Inc. (GOOGL) are driving operational efficiencies and enhancing the customer experience. Overall, Cintas is well-positioned for continued growth and success.
On Dec. 19, CTAS shares closed down more than 10% after reporting its Q2 results. Its EPS of $1.09 beat Wall Street expectations of $1.01. The company’s revenue was $2.6 billion, meeting Wall Street forecasts. Cintas expects full-year EPS to be between $4.28 to $4.34, and expects revenue in the range of $10.26 billion to $10.32 billion.
In the competitive arena of specialty business services, UniFirst Corporation (UNF) has taken the lead over CTAS, showing resilience with a 22.3% gain on a YTD basis. However, UNF lagged behind the stock with a 23.1% uptick over the past 52 weeks.
Wall Street analysts are cautious on CTAS’ prospects. The stock has a consensus “Hold” rating from the 18 analysts covering it. While CTAS currently trades above its mean price target of $199.47, the Street-high price target of $245 suggests an upside potential of 22.1%.
