UPDATE: Bank of America Reiterates on Cintas on Mixed Factors

In a report published Friday, Bank of America analyst Sara Gubins reiterated an Underperform rating on Cintas CTAS, and raised the price target from $46.00 to $54.00. In the report, Bank of America noted, “2Q14 (Nov) EPS of $0.70 was $0.04 above our estimate and $0.02 above consensus. Revenue was 1% above our forecast (organic growth of 7.1% YoY was flat with 1Q), with operating margins coming in 70bp above our estimate. We are increasing FY14E EPS by 1% to $2.78 (+10% YoY) & FY15E by 1% to $3.08 (+11% YoY). Cintas tightened FY14 revenue guidance to $4.525-4.575bn (+5-6% YoY) (previously $4.50-4.60bn). Uniform rental has been relatively strong, but paper prices have hit the document management segment and an expectation of declines in the direct sales segment keep revenue within the original range. Cintas tightened FY14E EPS to $2.73-2.79 (+8-10% YoY) from $2.70-2.79 previously.” Cintas closed on Thursday at $56.48.