These are top 10 stocks traded on the Robinhood UK platform in July
On Thursday, Baird maintained a Neutral rating on Cintas Corporation (NASDAQ:CTAS) stock but raised the price target to $209 from $194 following the company's first-quarter fiscal year 2025 results.
Cintas reported earnings that surpassed expectations, with revenue in line and gross margin performance exceeding forecasts. This led to a 10% earnings per share (EPS) increase, which was also helped by a favorable tax rate.
The company's updated fiscal 2025 guidance reflects its steady assessment of the macro environment and its own performance within that context. Cintas has started the fiscal year on a strong note, reaching the upper end of its performance range. This positive outcome stands in contrast to recent cautious industry survey results, indicating Cintas' effective execution.
The analyst highlighted Cintas' valuation as the reason for the Neutral stance, noting that the stock is trading at 32 times forward twelve-month (FTM) EBITDA and 48 times FTM EPS. These valuation multiples are record highs relative to the S&P 500 index.
This price target adjustment comes after Cintas delivered a robust financial performance in the first quarter of fiscal year 2025, demonstrating the company's ability to execute effectively in its market segment. Despite the strong operational results, Baird's position remains neutral based on the stock's current valuation metrics.
In other recent news, Cintas Corporation has reported record first-quarter revenues of $2.5 billion for fiscal year 2025, marking a 6.8% increase from the previous year. The company's diluted earnings per share (EPS) saw a significant rise of 18.3% to $1.10.
These robust quarterly outcomes were attributed to a record-high gross profit margin of 51.7% and an operating margin of 22.4%, marking an improvement of 106 basis points year-over-year.
In addition, Morgan Stanley has updated its assessment of Cintas, increasing the price target to $185 from the previous $170, while retaining an Equalweight rating on the stock.
This adjustment follows Cintas's solid performance, including earnings per share (EPS) that exceeded Morgan Stanley's estimate by 6.6%, or 7 cents. Other developments include Cintas raising its fiscal 2025 revenue guidance to between $10.22 billion and $10.32 billion and EPS to $4.17 - $4.25.
Lastly, despite the ongoing SAP system implementation which may pressure margins in fiscal 2025, Cintas continues to see double-digit growth in its rental division and first aid and safety services, showing resilience amid economic fluctuations.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.