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Investing.com - Citi has maintained its Sell rating and $163.00 price target on Cintas (NASDAQ:CTAS) following the company’s fiscal year 2025 earnings report. According to InvestingPro data, the stock is currently trading above its Fair Value, with analyst targets ranging from $163 to $257.
Cintas reported FY25 revenue of $10.3 billion and earnings per share of $4.40, slightly exceeding both consensus estimates and Citi’s projections of $10.3 billion and $4.39 per share. The company achieved organic growth of 8.0%, surpassing its guidance range of 7.4-7.7%, while fourth-quarter operating income came in 1.4% above consensus expectations. InvestingPro analysis shows impressive gross profit margins of 49.92%, though 6 analysts have recently revised their earnings expectations downward.
For fiscal year 2026, Cintas has provided guidance of $11.1 billion in revenue and $4.78 in earnings per share at the midpoint. While the revenue projection is 0.4% ahead of consensus estimates, the EPS guidance falls 1.4% below market expectations.
Citi attributes the lower EPS guidance partly to higher projected net interest expense of $98 million versus consensus estimates of approximately $93 million, but primarily to margin concerns. The firm noted that Cintas’ fourth-quarter uniform segment operating margin of 22.9% was 40 basis points below consensus expectations of 23.3%.
Citi analyst Leo Carrington indicated that understanding the nature of the fourth-quarter uniform margins and the fiscal year 2026 margin progression will be key factors to watch, noting that the FY26 guidance appears to contemplate only 20 basis points of margin improvement.
In other recent news, Cintas Corporation reported strong earnings, with revenue, earnings per share, and free cash flow all surpassing analyst estimates. The company achieved a 9.0% organic revenue growth, its highest quarterly growth rate this fiscal year, primarily driven by its First Aid & Safety and Other divisions. Despite these strong results, Cintas provided fiscal year 2026 revenue guidance that aligns with the lower end of projections, indicating possible future upward revisions. In terms of analyst ratings, Wells Fargo (NYSE:WFC) upgraded Cintas from Underweight to Equal Weight, citing the company’s potential to gain market share from competitors like Vestis. RBC Capital Markets also raised its price target for Cintas to $240, maintaining a Sector Perform rating, and expressed confidence in the company’s ability to outperform expectations. Conversely, Redburn-Atlantic downgraded Cintas to Sell, maintaining a price target of $171, citing concerns over valuation and potential economic challenges. This downgrade reflects Redburn’s view that Cintas’s current stock valuation may not fully account for potential headwinds, such as a slowdown in employment growth. These varied analyst perspectives highlight the diverse expectations for Cintas’s future performance amidst its recent developments.
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