Goldman Sachs Reiterates Buy Rating on Cintas (CTAS)

Goldman Sachs analyst George Tong reiterated a Buy rating and $253.00 price target on Cintas (NASDAQ: CTAS).

The analyst comments "Cintas reported healthy F2Q results with revenue and margin upside vs our estimates and consensus and the full-year guide raised. CTAS is seeing stable sales cycles and customer purchasing behaviors despite macro uncertainty. Organic revenue growth accelerated from 7.8% y/y in F1Q to 8.6% in F2Q, driven by new sales, record retention rates, pricing increases and expanded service contribution into existing accounts. The company has proven to be resilient to a slowing labor market given its ability to drive customer savings and penetrate the no-programmer market, as well as its greater focus on blue-collar verticals less affected by AI. Normalized for last year's gain on asset sale, incremental operating margins are also tracking to be ~30% for the year, consistent with management's 25-35% targeted range, supportive of margin expansion over the medium term driven by efficiency initiatives. We believe healthy and resilient organic revenue growth rates in the 7-9% range will drive valuation upside in CTAS shares. Reiterate Buy."

For an analyst ratings summary and ratings history on Cintas click here. For more ratings news on Cintas click here.

Shares of Cintas closed at $189.89 yesterday.

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