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On Wednesday, Morgan Stanley (NYSE:MS) maintained its Equalweight rating on Cintas Corporation (NASDAQ:CTAS) but increased the price target to $213 from the previous $195. The adjustment follows a model update that led to an optimistic outlook on the company’s future earnings before interest, taxes, depreciation, and amortization (EBITDA). According to InvestingPro data, Cintas currently generates $2.56 billion in EBITDA, with impressive gross profit margins of 49.62%.
Analysts at Morgan Stanley have raised their fiscal year 2025 and 2026 EBITDA estimates for Cintas by 2% and 3%, respectively. This revision is a response to the company’s strong margin performance in the recent quarter. The new price target of $213 is based on a projected standard price-to-earnings (P/E) multiple of around 40 times the company’s calendar year 2026 earnings. InvestingPro analysis indicates the stock currently trades at a P/E ratio of 48.8x, suggesting it may be overvalued relative to its peers. For detailed valuation metrics and 16 additional key insights, investors can access the comprehensive Pro Research Report on InvestingPro.
The research firm’s price target suggests that Cintas is valued at the upper end of the Diversified Business Services industry comparison set. Despite this bullish adjustment, Morgan Stanley prefers Waste Connections Inc . (NYSE:WCN), which is trading at approximately 31 times its calendar year 2026 P/E. They consider WCN to be a more defensive business compared to Cintas.
Additionally, the firm sees more potential upside in KLC, without specifying the details. They believe KLC’s shares have more room to grow from their current levels compared to Cintas.
Cintas Corporation specializes in providing highly specialized services to businesses of all types, primarily focusing on uniforms and related services. With a market capitalization of $82.78 billion and annual revenue of $9.94 billion, the company maintains strong financial health according to InvestingPro metrics. The company’s performance and market position are closely monitored by investors and analysts alike, with changes in financial estimates and targets potentially influencing market movements.
In other recent news, Cintas Corporation reported its fiscal third-quarter earnings for 2025, exceeding analyst expectations with an earnings per share (EPS) of $1.13, compared to the forecast of $1.05. The company also surpassed revenue projections, reporting $2.61 billion against the anticipated $2.6 billion. Following this announcement, Cintas raised its annual EPS guidance to a range of $4.36-$4.40 and its annual revenue guidance to between $10.28 billion and $10.305 billion. Additionally, Stifel analysts raised their price target for Cintas from $189.00 to $204.00, maintaining a Hold rating on the stock. This adjustment was based on current calendar year 2025 price-to-earnings (P/E) and enterprise value-to-EBITDA (EV/EBITDA) valuations. The analysts noted the stability in customer demand from "Main Street America" and the company’s ability to perform amid challenging economic conditions. Cintas also highlighted its strong market presence, serving 1 million customers across the U.S. and Canada, with notable growth in its healthcare and hospitality segments.
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