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Cintas Corporation

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Cintas recorded strong third-quarter fiscal 2017 results on the back of healthy top-line growth, with adjusted earnings comfortably beating the Zacks Consensus Estimate by $0.05. Cintas has completed the acquisition of rival G&K Services. The transaction is likely to fuel its growth momentum with an extended product portfolio and additional processing capacity. Cintas aims to continually achieve revenue build-up by increasing penetration levels at existing customers and broadening the customer base to include fresh business segments. Cintas’ shares have also matched the industry performance in the last six months. However, volatility in raw material prices and third-party supply constraints remain potential headwinds. Moreover, persistent challenging macroeconomic environment has mostly driven customers to perform certain in-house services themselves instead of outsourcing them to Cintas, which have resulted in some loss of businesses.

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