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Investing.com - UBS lowered its price target on UniFirst Corp (NYSE:UNF) to $194.00 from $196.00 on Thursday, while maintaining a Neutral rating on the uniform rental company. According to InvestingPro data, the company maintains strong financial health with a GOOD overall rating and trades below its Fair Value, suggesting potential upside.
The price target adjustment follows a 10% drop in UniFirst shares on Wednesday after the company released its fiscal third-quarter results. InvestingPro analysis indicates the stock is currently in oversold territory, with technical indicators suggesting a potential overselling situation.
UBS noted that UniFirst’s Core Laundry segment posted organic growth of just 1.1% in the fiscal third quarter, partly affected by softness in direct sales.
The research firm pointed out that UniFirst indicated wearer levels trended lower during the quarter while pricing remained competitive in the market.
UBS reduced its fiscal 2026 Core Laundry growth forecast to 2.6% from 3.3%, noting that this outlook, combined with a likely softer fiscal fourth-quarter exit rate, justified maintaining its neutral stance despite good underlying margin improvement.
In other recent news, UniFirst Corporation reported its third-quarter fiscal 2025 earnings, revealing a mixed performance. The company exceeded earnings per share (EPS) expectations with a reported EPS of $2.17, surpassing the projected $2.10. However, UniFirst’s revenue came in slightly below expectations at $610.8 million, missing the forecasted $614.5 million. Despite the revenue miss, the company experienced a year-over-year revenue increase of 1.2%, and net income rose by 5.4% to $39.7 million. The company’s First Aid segment showed notable growth, increasing by 9% year-over-year. UniFirst continues to face potential challenges, including new tariffs that could impact sourcing costs. The company has revised its annual revenue guidance to a range of $2.422 billion to $2.432 billion, with an increased diluted EPS guidance of $7.60 to $8.00. Additionally, UniFirst is investing in technology and infrastructure, with capital expenditures totaling $109.8 million.
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