We issued an updated research report on Cintas Corporation (CTAS - Free Report) on Jun 14.
The company currently carries a Zacks Rank #3 (Hold) and has a market capitalization of approximately $24.7 billion.
Below we discussed why it will be prudent for investors to hold on to this stock for now.
Factors Favoring Cintas
Share Price Performance, Earnings Projections: Market sentiments seem to be working in favor of Cintas over time. In the past six months, the company’s share price has gained 41.8%, higher than the industry’s growth of 38.4%.
We believe that impressive financial results helped in driving sentiments for the stock. In third-quarter fiscal 2019 (ended February 2019), Cintas recorded positive earnings surprise of 7.60%. Its share has increased 13.6% since the results released on Mar 21, 2019. Also, it pulled off average positive earnings surprise of 6.09% for the last four quarters.
For fiscal 2019 (ended May 2019; results not yet released), the company anticipates gaining from solid customer base, focus on product portfolio enhancement, effective implementation of enterprise resource planning system and synergistic gains from buyouts will be advantageous. Earnings per share in the year is predicted to be $7.42-$7.48, up from the previously announced $7.30-$7.38.
Also, the Zacks Consensus Estimate for the company’s earnings is pegged at $7.46 for fiscal 2019 and $8.30 for fiscal 2020 (ending May 2020). On a year-over-year basis, these estimates reflect growth of 25.6% for fiscal 2019 and 11.2% for fiscal 2020.
Cintas Corporation Price and Consensus