CTAS - Jefferies downgrades Cintas citing valuation concerns

2023-03-31 09:16:17 ET

Cintas Corporation ( NASDAQ: CTAS ) was downgraded on Friday by Jefferies even as teh company posted stronger than expected Q3 results .

The bank’s analysts cited a cloudy macro backdrop as a key concern moving forward, with tougher comparisons expected for the remainder of the year. The valuation also appears rich, according to the team’s analysis.

“We’re downgrading shares of CTAS to Hold from Buy not because of anything related to the quarter or even the long-term structural growth opportunities of the business,” the note clarified. “We believe FY2024 will be a challenging year for the business in the face of a tougher macro backdrop and thus believe Street estimates are too high.”

They added that the stock’s over 20% rise since October has stretched the valuation.

“To be clear, we like the business and think the company is very well run, however, valuation and our view of Street estimates being too high in light of tougher macro backdrop moves us to

the sidelines,” the team concluded.

Shares of Cintas Corporation ( CTAS ) slipped 0.8% shortly before Friday’s market open.

Read the latest earnings call transcript .

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