Cintas (CTAS) Downgraded to “Sell” at Zacks Investment Research

Zacks Investment Research downgraded shares of Cintas (NASDAQ:CTAS) from a hold rating to a sell rating in a research note published on Monday morning.

According to Zacks, “Over the past three months, Cintas looks significantly overvalued compared with the industry. Rising costs of sales remain a concern for the company. We believe, if unchecked, higher costs and operating expenses will prove detrimental to Cintas’ margins and profitability. Also, the company is exposed to market risks as it procures raw materials from a wide variety of domestic and international suppliers. Moreover, the company faces stiff competition from national, regional and local companies on various factors such as design, price, quality, service and convenience to customers. Further, increases in debt levels can increase its financial obligations. However, in the past three months, the company’s shares have outperformed the industry.”

A number of other equities research analysts also recently weighed in on the company. Bank of America upgraded Cintas from a neutral rating to a buy rating and set a $166.50 target price for the company in a research report on Thursday, January 3rd. They noted that the move was a valuation call. BidaskClub upgraded Cintas from a hold rating to a buy rating in a research report on Thursday, December 27th. ValuEngine upgraded Cintas from a hold rating to a buy rating in a research report on Monday, February 4th. Northcoast Research restated a neutral rating on shares of Cintas in a research report on Friday, December 21st. Finally, Credit Suisse Group dropped their target price on Cintas from $205.00 to $160.00 and set a neutral rating for the company in a research report on Friday, December 21st. Two research analysts have rated the stock with a sell rating, four have assigned a hold rating, seven have issued a buy rating and one has assigned a strong buy rating to the stock. Cintas presently has a consensus rating of Buy and an average target price of $190.77.



Cintas stock opened at $204.89 on Monday. The company has a current ratio of 1.99, a quick ratio of 1.70 and a debt-to-equity ratio of 0.84. The firm has a market capitalization of $21.49 billion, a price-to-earnings ratio of 34.49, a price-to-earnings-growth ratio of 2.27 and a beta of 1.09. Cintas has a 52 week low of $155.98 and a 52 week high of $217.34.

Cintas (NASDAQ:CTAS) last posted its quarterly earnings data on Thursday, December 20th. The business services provider reported $1.76 EPS for the quarter, topping analysts’ consensus estimates of $1.72 by $0.04. The company had revenue of $1.72 billion for the quarter, compared to analyst estimates of $1.69 billion. Cintas had a return on equity of 24.87% and a net margin of 14.10%. The business’s revenue was up 7.0% on a year-over-year basis. During the same quarter in the previous year, the firm earned $1.31 earnings per share. Research analysts anticipate that Cintas will post 7.35 earnings per share for the current year.

In related news, VP Thomas E. Frooman sold 1,740 shares of the company’s stock in a transaction dated Thursday, February 14th. The stock was sold at an average price of $201.79, for a total value of $351,114.60. Following the completion of the sale, the vice president now owns 124,666 shares in the company, valued at $25,156,352.14. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at the SEC website. Also, Director Ronald W. Tysoe sold 3,000 shares of the company’s stock in a transaction dated Wednesday, February 13th. The shares were sold at an average price of $201.64, for a total value of $604,920.00. Following the completion of the sale, the director now owns 5,667 shares of the company’s stock, valued at approximately $1,142,693.88. The disclosure for this sale can be found here. In the last 90 days, insiders have sold 5,740 shares of company stock valued at $1,156,635. 19.10% of the stock is currently owned by corporate insiders.

Hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. Nelson Roberts Investment Advisors LLC bought a new stake in Cintas in the fourth quarter valued at about $25,000. Capital Financial Planning LLC bought a new stake in Cintas in the fourth quarter valued at about $29,000. Lindbrook Capital LLC bought a new stake in Cintas in the fourth quarter valued at about $105,000. ETF Managers Group LLC increased its holdings in Cintas by 18.2% in the fourth quarter. ETF Managers Group LLC now owns 778 shares of the business services provider’s stock valued at $131,000 after purchasing an additional 120 shares during the last quarter. Finally, Truehand Inc bought a new stake in Cintas in the fourth quarter valued at about $168,000. Institutional investors and hedge funds own 66.33% of the company’s stock.

Cintas Company Profile

Cintas Corporation provides corporate identity uniforms and related business services primarily in North America, Latin America, Europe, and Asia. It operates through Uniform Rental and Facility Services and First Aid and Safety Services segments. The company rents and services uniforms and other garments, including flame resistant clothing, mats, mops and shop towels, and other ancillary items; and provides restroom cleaning services and supplies, and carpet and tile cleaning services, as well as sells uniforms directly.

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