- RBC Capital analyst Ashish Sabadra lowered the price target on Cintas Corp CTAS to $450 (an upside of 16%) from $475, citing elevated macroeconomic uncertainty. Sabadra maintained the Outperform rating on the shares.
- The analyst stated that CTAS’ 4Q22 results beat expectations and provided strong FY23 revenue guidance. He believes revenues are more resilient than the prior downturn, namely the Global Financial Crisis in 2008.
- Sabadra believes that cross-selling opportunities, robust pricing, share gains, improved retention, and large vertical opportunities such as healthcare/education/government bode well for growth.
- Related: Cintas Q4 Earnings Top Estimates
- The analyst sees fuel headwinds abating, lower than his estimate of 38bps, where these headwinds could lessen if oil continues to decline.
- Low net leverage (<2x) provides significant buyback and M&A opportunities, Sabadra added.
- Morgan Stanley analyst Toni Kaplan raised the price target on Cintas to $362 (a downside of 6.5%) from $357 while maintaining the Equal-Weight rating on the shares.
- Price Action: CTAS shares are trading higher by 0.10% at $387.52 on the last check Friday.
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