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Cintas (CTAS) to Report Q1 Earnings: Is a Beat in the Cards?

Cintas Corporation CTAS is slated to report first-quarter fiscal 2021 (ended August 2020) results on Sep 23, before market open.

The company pulled off an earnings surprise of 9.09%, on average, in the preceding four quarters, surpassing estimates on all occasions. In fourth-quarter fiscal 2020 (ended May 2020), Cintas reported adjusted earnings of $1.35 per share, which surpassed the Zacks Consensus Estimate of $1.23 by 9.76%.

In the past three months, the company’s shares have rallied 17.9% compared with the industry’s growth of 17%.

Factors at Play

Cintas is expected to have benefited from strength in its First Aid and Safety Services segment during the fiscal first quarter. Solid demand for its personal protective equipment including face masks, face fields, sanitizers and other critical items, is likely to have augmented its top-line performance. Also, the company’s Uniform Rental and Facility Services segment might have gained from the gradual reopening of several of its customers’ businesses.

Further, strength across the company’s G&K Services business, supported by strong product portfolio and processing capacity as well as solid customer service, is anticipated to have boosted fiscal first-quarter top line. In addition, its focus on enhancement of product portfolio and improving customer base might have supported growth.

Moreover, some of the actions taken by the company, including the reduction of discretionary expenses, hiring freeze and strengthening of supply-chain, are anticipated to have helped it to maintain a healthy margin performance amid the coronavirus crisis.

However, the overall low demand environment, owing to outbreak-led issues, is expected to have had a bearing on the company’s top-line performance in the to-be-reported quarter.

Amid this backdrop, the Zacks Consensus Estimate for fiscal first-quarter revenues for Uniform Rental and Facility Services is currently pegged at $1,343 million, indicating growth of 5.7% on a sequential basis. Revenues for First Aid and Safety Services are pegged at $190 million, implying sequential decline of 3.1%. In addition, the consensus estimate for revenues for the All Other segment, which includes uniform direct sale and fire protection services businesses, currently stands at $160 million, suggesting a sequential increase of 5.3%.

Earnings Whispers

Our proven model suggests an earnings beat for Cintas this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The company has an Earnings ESP of +9.51% as the Most Accurate Estimate is pegged at $2.36, higher than the Zacks Consensus Estimate of $2.16.

Cintas Corporation Price and EPS Surprise

Cintas Corporation Price and EPS Surprise

Cintas Corporation price-eps-surprise | Cintas Corporation Quote

Zacks Rank: Cintas carries a Zacks Rank #2.

Other Key Picks

Here are some other companies that you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat this quarter:

Kaman Corporation KAMN has an Earnings ESP of +2.44% and it sports a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

II-VI Incorporated IIVI has an Earnings ESP of +10.35% and it flaunts a Zacks Rank #1.

NortonLifeLock Inc. NLOK has an Earnings ESP of +4.62% and a Zacks Rank of 2 at present.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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