CTAS - Cintas: M&A And More Rental Services May Lead To 29% Upside Potential
- Cintas Corp offers uniform rental and facility services as well as first aid and safety services.
- The customer base is well-diversified. If clients from one sector decide to leave Cintas, the company will have other clients from other sectors.
- 60% of the company’s new customers are not in the rental program. They may soon purchase rental services, which would enhance sales growth.
- I used sales growth close to 8.5%, capital expenditures of $143-$377 million, and free cash flow of $1.2-$1.3 billion.
- I believe that the upside potential in the company’s valuation is more significant than the downside risk.
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Cintas: M&A And More Rental Services May Lead To 29% Upside Potential