CTAS Stock Study (6-26-26)

Posted by Mark on August 14, 2026 at 07:15 | Last modified: June 27, 2026 08:35

I recently did a stock study on Cintas Corp. (CTAS, $169.09).

M* writes:

     > Cintas has roots dating back to 1929, when the Farmer family cleaned
     > and resold dirty rags to manufacturing plants in Ohio. The firm has
     > expanded its business organically and through acquisitions, and today
     > Cintas acts as a one-stop outsourcing partner for businesses. Cintas
     > will design, manufacture, collect, and clean every employee uniform
     > for a small weekly sum, taking on the upfront capital expense itself.
     > At the same stop, Cintas can also replace soiled or depleted mats,
     > mops, trash liners, towels, first aid supplies, fire extinguishers, and
     > cleaning products. Businesses value an outsourcing partner like
     > Cintas as it simplifies operations and leaves noncore tasks with
     > high regulatory standards in the hands of professionals.

Over the past 10 years, this large-size company grows sales and earnings at annualized rates of 8.0% and 20.6% (FY ends May 2026). Lines are up, mostly straight, and parallel. Value Line (VL) gives an Earnings Predictability score of 100. Shares outstanding increase 6.7% (0.8%/year).

Over the past 10 years, PTPM leads peer and industry averages while increasing from 14.6% to 21.9% (’25) with a last-5-year mean of 19.8%. ROE is even with peer averages while leading the industry and increasing from 21.9% to 38.6% (’25) with a last-5-year mean of 35.0% (shareholder equity consistently positive with 10.9% CAGR). Debt-to-capital is less than peer and industry averages while falling from 41.4% to 36.2% (’25) with a last-5-year mean of 41.0%.

Quick ratio is 0.95 and interest coverage 24.2 per M* who assigns “Wide” Economic Moat, gives an “Exemplary” rating for Capital Allocation, and an A grade for Financial Health (per BI website). VL gives a A grade for Financial Strength.

With regard to sales growth:

• YF gives YOY ACE 8.5% and 7.5% for ’26 and ’27 (based on 17 analysts).
• Zacks gives YOY ACE 8.5% and 7.5% for ’26 and ’27 (9 analysts).
• VL projects 7.9% per year from ’25-’30.
• CFRA projects 9.5% YOY and 8.4% per year for ’26 and ’25-’27, respectively.
• M* gives a 2-year ACE of 9.3% while projecting 8.1% per year from ’25-’30 in Equity Report.

My 7.0% per year forecast is below the range.

With regard to EPS growth:

• MarketWatch gives ACE 11.3% both YOY and per year for ’27 and ’26-’28, respectively (based on 22 analysts).
• Nasdaq.com gives ACE 11.0% and 10.9% per year for ’26-’28 and ’26-’29 (11 / 4 / 2 analysts for ’26 / ’28 / ’29).
• Seeking Alpha projects 4-year CAGR of 11.2%.
• Finviz gives 5-year annualized ACE of 11.2% (6).
• Argus projects 5-year CAGR of 12.0%.
• LSEG has LTG at 11.7%.
• YF gives YOY ACE 11.3% and 10.9% for ’26 and ’27, respectively (13).
• Zacks gives YOY ACE 11.1% and 10.8% for ’26 and ’27 along with 5-year annualized growth of 11.6% (11).
• VL projects 12.4% per year from ’25-’30.
• CFRA projects 12.3% YOY and 11.5% per year for ’26 and ’25-’27 along with 3-year CAGR of 11.0%.
• M* gives long-term ACE of 11.7% and projects 11.3% (lower of GAAP/adjusted) in Equity Report.

My 10.0% forecast is below the long-term-estimate range (mean of eight: 11.6%). Initial value is ’25 EPS of $4.40/share rather than 2026 Q3 EPS of $4.74 (TTM).

My Forecast High P/E is 35.0. Over the past decade, high P/E increases from 23.3 to 51.8 (’25) with last-5-year mean of 42.2 and a last-5-year-mean average P/E of 36.1. I am below the last five years.

My Forecast Low P/E is 26.0. Over the past decade, low P/E increases from 19.1 to 38.1 (’25) with a last-5-year mean of 30.0. I am [aggressively] forecasting the lowest since ’20.

My Low Stock Price Forecast (LSPF) of $114.40 is default based on initial value from above: 32.3% less than previous close and 29.0% less than the 52-week low.

Over the past 10 years, payout ratio (PR) increases from 25.7% to 35.5% (’25). My 23.0% forecast is at bottom of the range.

These inputs land CTAS in the HOLD zone with a U/D ratio of 1.4. Total Annualized Return (TAR) is 8.6%.

PAR (using Forecast Average—not High—P/E) of 5.8% is less than I seek for a large-size company. If a healthy margin of safety (MOS) anchors the study, then I can proceed based on TAR instead.

To assess MOS, I start by comparing my inputs with those of Member Sentiment (MS). Based on 85 studies done in the past 90 days (my study and 24 other outliers excluded), averages (lower of mean/median) for projected sales growth, projected EPS growth, Forecast High P/E, Forecast Low P/E, and PR are 8.6%, 10.7%, 37.0, 28.0, and 37.3%, respectively. I am lower across the board. VL projects a future average P/E of 30.0 that is less than MS (32.5) and less than mine (30.5).

MS high / low EPS are $7.84 / $4.71 versus my $7.09 / $4.40 (per share). My high EPS is less due to a lower growth rate. VL (M*) high EPS of $7.90 ($7.55) is greater than both (in the middle).

MS LSPF of $130.60 implies a Forecast Low P/E of 27.7: less than the above-stated 28.0. MS LSPF is 1.0% less than the default $4.71/share * 28.0 = $131.88 resulting in more conservative zoning. MS LSPF is 14.2% greater than mine, though.

MOS is moderate in the study because my inputs are near or below some historical/analyst/MS averages/ranges (forecast P/E range is the big exception). Supporting the MOS is MS TAR exceeding mine by 3.5% per year.

With regard to valuation, PEG is 2.7 and 3.2 per Zacks and my projected P/E: overvalued (M* has 2.3). Relative Value [(current P/E) / 5-year-mean average P/E] is fair at 1.0. M* reports stock fairly valued while CFRA reports 37% overvalued.

Per U/D, CTAS is a BUY under ~$148/share. Given a forecast high price ~$248, [248.2 / ((14.17 / 100 ) +1 ) ^ 5] ~ $128 would meet the BetterInvesting® TAR criterion.

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