Cintas Corp, which provides products and services to businesses, reported better-than-expected earnings in the fiscal fourth quarter and said its revenue rose to $1.84 billion compared to $1.62 billion in last year’s fourth quarter.
Cintas Corp, which provides products and services to businesses, reported better-than-expected earnings in the fiscal fourth quarter and said its revenue rose to $1.84 billion compared to $1.62 billion in last year’s fourth quarter.
The company said its diluted earnings per share (EPS) were $2.47 in the fourth quarter of fiscal 2021, an increase of 83.0% from last year’s fourth-quarter diluted EPS of $1.35. That was higher than the Wall Street consensus estimates of $2.31 per share.
Cintas predicted earnings in a range of $10.35 to $10.75 per share on revenues between $7.53 billion and $7.63 billion for the fiscal year 2022. That was lower than the market expectations of $10.03 per share on revenues of $7.66 billion for the year.
Cintas Corp shares traded 3.18% higher at $380.92 on Friday. The stock rose about 8% so far this year.
“4Q above MSe, but FY22 guidance was underwhelming with rev and EPS 1% below our forecast. Guidance does imply margin expansion, however, despite inflationary pressures seen in the industry. price target to $353, though stay EW as multiple remains full,” noted Toni Kaplan, equity analyst at Morgan Stanley.
“We think fundamentals will perform well in a cyclical recovery given CTAS‘ recent history of outperforming labor growth. MS economists are forecasting significant employment growth in coming quarters, with the ending 2022 unemployment rate only 0.7% above 2019 levels. With a strong balance sheet, potential M&A could be extremely accretive to CTAS earnings. Though valuation is high relative to history, we do not see a near-term catalyst to cause the multiple to contract.”
Eight analysts who offered stock ratings for Cintas Corp in the last three months forecast the average price in 12 months of $400.67 with a high forecast of $425.00 and a low forecast of $353.00.
The average price target represents a 4.97% change from the last price of $381.69. From those eight analysts, five rated “Buy”, three rated “Hold” while one rated “Sell”, according to Tipranks.
Morgan Stanley gave the stock price forecast of $353 with a high of $601 under a bull scenario and $209 under the worst-case scenario. The firm gave an “Equal-weight” rating on the company’s stock.
Several other analysts have also updated their stock outlook. Jefferies raised the target price to $425 from $400. JPMorgan lifted the target price to $430 from $390. Credit Suisse upped the target price to $375 from $350. CGRA increased the target price by $16 to $366. BofA Global raised the price objective to $358 from $353.
“What to do with CTAS shares: Buy more if you believe the company can consistently deliver 6-8% organic growth and that post-COVID-19 outsourcing picks up on uniform rental. We also believe the under-levered balance sheet is underappreciated in terms of larger-scale M&A,” noted Hamzah Mazari, equity analyst at Jefferies.
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Vivek has over five years of experience in working for the financial market as a strategist and economist.