Analyst Heather Balsky's $580 price target suggests shares stand to grow 16.5% from Monday's close.
Bank of America has a better-than-consensus outlook on the U.S. economy, and thinks Cintas will be a major beneficiary as recession risks wane. Analyst Heather Balsky upgraded the stock to buy from neutral, calling Cintas a "best-in-breed company" and attributing the new rating to the firm's growing confidence in a potential soft landing for the U.
S. economy. Balsky's $580 price target suggests shares stand to grow 16.5% from Monday's close. "Cintas is the market leader in uniform rental and other facility services … since the global financial crisis, it has established an admirable record for strong execution and healthy capital returns," Balsky said in a Tuesday note. With BofA's economics team no longer expecting a near-term recession, we're more confident in Cintas' sales and margin momentum." Shares of the Ohio-based work uniform and services company have gained 10.2% this year. So far this month, the stock has shed about 1.3%. Balsky pointed to Cintas' track record of beating and raising its earnings guidance, noting that the company beat the mid-point of its initial earnings-per-share guidance by 7% in fiscal years 2022 and 2023. The firm's earnings estimate for fiscal years 2024 and 2025 are higher than the company's guidance as well as Wall Street's expectations, she said in the note . "We think Cintas is poised for EPS beats driven by sales and margin outperformance," Balsky said. "It benefits from an ongoing secular shift to outsourcing, as well as its focus on route density and cost initiatives." Balsky also lifted her sales growth estimates for fiscal year 2024, with the firm's outlook no longer factoring in modest pressure on Cintas' uniform rental and first aid kit volumes driven by softer employment in a recessionary scenario. "COVID-related supply chain and labor market disruption increased businesses' desire to outsource, and we think this will persist post-recovery," the analyst said. — CNBC's Michael Bloom contributed to this report.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
‘The dream of homeownership is alive,’ says Bank of America’s head of retail lending. But, for many, it’s just that — a dream.Bank of America's Matt Vernon remains positive on the housing market, despite many challenging headwinds.
Read more »
Kenvue’s Stock Decline Is a ‘Solid’ Buying OpportunityDeutsche Bank Research analyst Steve Powers upgraded Kenvue to Buy from Hold over the weekend.
Read more »
EVgo receives first shipment of Build America, Buy America fast chargers By Investing.comEVgo receives first shipment of Build America, Buy America fast chargers
Read more »
Bank of America says Q3 investment banking fees down 30%-35% for sector By ReutersBank of America says Q3 investment banking fees down 30%-35% for sector
Read more »
Bank of America Corp. stock rises Monday, still underperforms marketShares of Bank of America Corp. inched 0.42% higher to $28.48 Monday, on what proved to be an all-around positive trading session for the stock market, with...
Read more »
Investors may be 'overlooking' potential catalysts for this AI winner, says Bank of AmericaBank of America still sees major upside ahead for this AI stock that's had a massive year-to-date rally, despite cyclical headwinds for the chip industry.
Read more »