- Cintas stock rose as much as 9% Wednesday after beating earnings estimates for its fiscal fourth-quarter earnings.
- The Nasdaq component announced improved 2020 guidance, with revenue and earnings per share estimates edging out Wall Street expectations.
- Cintas — which focuses on business services like uniform and workplace supply rental — is likely to profit from the strong labor market.
- June’s US jobs report announced an increase 224,000 nonfarm payrolls, higher than economists’ expected gain of 164,000.
- Watch Cintas trade live here.
Cintas stock surged as much as 9% after beating earnings estimates Tuesday afternoon and boosting profit guidance for 2020.
The stock traded at $260.21 per share as of 3:07 p.m. ET Wednesday. The stock’s consensus price target is $225.44, according to Bloomberg data.
The Nasdaq component reported earnings per share from continuing operations at $2.07, edging out the consensus estimate of $1.93. Its fiscal fourth-quarter revenue of $1.79 billion narrowly beat Wall Street’s expectation of $1.78 billion.
Cintas also adjusted its 2020 expectations, pushing them higher than previous estimates. Revenue in 2020 is expected to land between $7.24 billion and $7.31 billion, with the previous consensus estimate set at $7.28 billion.
The company shifted its 2020 adjusted EPS guidance higher as well, with its new range of $8.30 to $8.45 beating the consensus estimate of $8.28.
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“All businesses care about image, safety, cleanliness or compliance, and businesses continue to outsource to concentrate on their core competencies. We are well positioned to continue to benefit from these tailwinds,” J. Michael Hansen, the CFO of Cintas, said in a quarterly earnings call.
The company focuses on business services like uniform rental and workplace equipment, and is poised to profit from the strong job market detailed in a recently released government data. The US jobs report showed the economy adding roughly 224,000 nonfarm payrolls in June, beating economists’ expectations of a gain closer to 164,000. The unemployment rate rose slightly to 3.7%.
“Our opportunity for continued growth is great. We have a product or service to help nearly every business get ready for the workday,” Hansen said.
Cintas currently has 7 “buy” ratings, 6 “hold” ratings, and 2 “sell” ratings from Wall Street analysts, according to Bloomberg data.Cintas stock is up 53.9% in the year to date.
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