Cintas Corporation (NASDAQ: CTAS) will release its fiscal Q1 2022 earnings for the quarter ending August 31 on September 29, 2021, before the market open.
What to look for
Cintas benefited from growth in its healthcare and hygiene end markets and strong demand for PPEs in the most recent quarter reported. The trend is expected to have persisted in the current reporting quarter, boosting the First Aid and Safety Services segment's top-line performance. For Q1 2022, the estimated First Aid and Safety Services sector revenues is $198 million, representing a 2.9% YoY decrease and a 5.9% QoQ increase. The Uniform Rental and Facility Services segment's performance is likely to have been enhanced by the reopening of the company and increased client capacity. In addition, the All Other segment's top-line performance is projected to have been enhanced by progress in the fire businesses.
Earnings: Stockearning’s Estimated EPS for Q1 2022 is expected to top Q4 2021's EPS of $2.47. The company has reported impressive results in the last four quarters, topping estimates on all occasions. In addition, in the past 12 quarters, the company has topped estimates 12 times (100%) and missed zero times (0%).
Revenue: In Q4 2021, the company had revenue of $1.84 billion compared to $1.62 billion in Q4 2020. For the fiscal year 2021 ended May 31, the company reported revenue of $7.12 billion with EPS of $10.24 compared to revenue of $7.12 billion and EPS of $8.11 in fiscal 2020. For fiscal 2022 the company expects a revenue range of $7.53 billion to $7.63 billion with diluted EPS of $10.35 to $10.75. The effective tax rate for fiscal 2022 will be between 19.5% and 20.5%, and this high effective tax rate will negatively impact EPS guidance for 2022 by $0.85.
Stock movement: Since the last earnings release, Cintas's share price has gained 5.94% from $378.95 to the previous close of $401.47. Following the earnings release, Cintas shares have been UP 24 times out of the past 44 quarters. So, historical price reaction suggests a 54% probability of the shares going up once the company reports Q1 2022 results. According to the Stockearning algorithm, the predicted price move on the first day is 3%, while the predicted move on the seventh day is 4%.
What analysts are saying
RBC Capital analyst Ashish Sabadra commenced coverage on Cintas with a “Buy” rating and a target price of $450. According to Sabadra, Cintas is a market leader in the $25 billion uniform rental business, which is "very fragmented and huge." In addition, the analyst said that enhanced emphasis on health and safety because of the pandemic would increase the inclination to outsource uniform rental and facility services adoption.
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