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Cintas (NASDAQ:CTAS) on Monday was downgraded to Sector Perform from a previous investment rating of Outperform by analysts at RBC Capital Markets. They said the uniform rental company faces challenges as the labor market weakens.
“Uniform rental and facility services revenue growth could moderate with macro and employment growth slowdown,” Ashish Sabadra, analyst at RBC, said in a July 15 report. “In addition, Cintas’s (CTAS) weak job postings are also likely an early indicator for growth moderation.”
Shares of Cintas (CTAS) were little changed by early afternoon in New York on Monday.
RBC’s price target for Cintas (CTAS) of $725 a share is based on an estimated price-to-earnings multiple of about 42 times earnings per share of $17.28 for calendar year 2025.
“Historically, Cintas (CTAS) has provided conservative guidance and therefore setting up the company for beat and raise while capital allocation could provide upside to earnings guidance,” according to RBC. “However, given peak employment and macro headwinds, we see the potential for guidance that underwhelms.”