UBS Cuts Cintas (CTAS) Price Target but Sees Opportunity in Margin Strength and UniFirst Deal

Cintas Corporation (NASDAQ:CTAS) is included among the Dividend Stock Portfolio for Income: 15 Stocks to Invest In.

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On March 26, UBS Group AG lowered its price recommendation on Cintas Corporation (NASDAQ:CTAS) to $228 from $235. It reiterated a Buy rating on the stock. The firm noted that Cintas reported 8.2% organic growth, even though payroll growth remained limited. Earnings per share came in line with expectations but did not exceed them, which the analyst suggested could be tied to the timing of SG&A expenses. At the same time, the company raised its full-year outlook. With EBIT margins continuing to improve and the stock trading at a lower multiple, the analyst sees a compelling setup, especially when viewed against the longer-term potential of the pending UniFirst Corporation deal.

During the fiscal Q3 2026 earnings call, management said it expects full-year revenue to land between $11.21 billion and $11.24 billion. That points to growth of roughly 8.4% to 8.7%. Adjusted diluted EPS is projected in the range of $4.86 to $4.90, suggesting growth of about 10.5% to 11.4%. Management also clarified that this EPS outlook excludes one-time costs tied to the UniFirst acquisition. These costs are expected to reduce diluted EPS by about $0.03 to $0.04 for the full year. CFO Garula indicated that most of these expenses should show up in the fourth quarter and are not expected to materially affect third-quarter results.

The guidance assumes stable foreign exchange rates. It also reflects a projected net interest expense of around $101 million and an effective tax rate of 20%.

Cintas Corporation (NASDAQ:CTAS) focuses on developing uniform programs using fabric. It serves businesses of various sizes, mainly across the United States, as well as in Canada and Latin America. The company operates through two segments: Uniform Rental and Facility Services, and First Aid and Safety Services.

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