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Truist has initiated Cintas (NASDAQ:CTAS) with a buy rating saying that the work uniform company is poised for upside margin gains due to a return to normalized pricing increases and moderating labor and material costs.
The firm has a $625 price target (~17% upside based on Friday’s close).
Analyst Jasper Bibb said upside margins could drive fiscal year 2026 consensus EPS 10% or more higher.
He added that Cintas (CTAS) is poised for incremental margins at the upper end of the company’s historical 20%-30% range over the next two years due to moderating wage inflation; favorable material pricing trends; and efficiencies through Smart Truck initiatives.
Cintas (CTAS) “leads peers in customer retention (95%) and recurring revenue (93%) with what we believe is a (long-term) trajectory toward ~30% operating margins,” Bibb noted.