The return of blue-collar jobs is something I’ve been talking about and keeping a close eye on for some time now, and one related company that I’ve also been watching closely recently reported earnings that blew the Street’s expectations out of the water.
Cintas Corporation (NASDAQ:CTAS) is a leading provider of corporate identity uniform programs, and it also provides pretty much everything else a company could ever need — entrance and logo mats, restroom supplies, promotion productions, first aid and safety products, carpet and tile cleaning and more.
It operates more than 400 facilities in North America, including six manufacturing plants and eight distribution centers.
Need something? Just give CTAS a ring and they’ll hook you right up.
There are many reasons why I like company, but one of the most important is that it is a proxy for blue collar jobs as well as other key industries:
- Food Services
CTAS Stock by the Numbers
As I mentioned, Cintas reported a strong fiscal-first-quarter report at the end of September, allowing the shares to surge to a new 52-week high. Adjusted earnings of $1.48 a share came in better than estimates of $1.30 a share, and revenue increased 27% year-over-year to $1.61 billion, which was also ahead of expectations of $1.57 billion.
The company saw solid growth in its two main business segments, with uniform rental revenue increasing 8% and first aid and safety revenue gaining 9.2%.
Management also raised their guidance for the full fiscal year, forecasting revenue of $6.325 billion-$6.4 billion and earnings of $5.30-$5.38 a share. These estimates even include $10-$15 billion in lost revenue as a result of the hurricanes affecting Texas, Florida and Puerto Rico.
It should also be noted that three months ago, Wall Street was modelling for EPS of $4.84, and just before the release of the report analysts were up to $5.21.
It’s clear the Street underestimated the company, and the shares reaped the rewards as a result.
CTAS stock is already up more than 28% so far in 2017, but I expect it to continue outperforming as the economy keeps picking up steam — remember, a strong jobs market is great for this company. I think the stock has the potential to rally to $170 over the next year.
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