Cintas is Thursday's pick for IBD 50 Growth Stocks To Watch. The stock is climbing back after a pullback from a buy point.
Cintas provides products and services to businesses, including uniforms, cleaning supplies, first aid and safety products and safety courses. The company ranks No. 1 out of 23 stocks in the outsourcing services industry group. The group is a suboptimal No. 135 out of the 197 IBD industry groups.
Cintas Stock Climbs Back
Cintas stock is recovering after it tapped the 704.84 buy point of an early stage flat base. The stock edged above the entry on May 23, but reversed to close down on the day. Shares briefly undercut the 50-day moving average, but have been bouncing back.
The stock gapped up more than 8% on March 27, following the company's better-than-expected fiscal third-quarter earnings and sales report on March 27. Management also raised its fiscal 2024 profit and revenue guidance.
The jump started the flat base. Shares bottomed at the 50-day line on May 2, the day the company announced that its board approved a 4-for-1 stock split. The split goes into effect Sept. 12.
Cintas stock suffered after Citigroup downgraded it to sell from neutral but raised its price target to 570 from 530 on May 24.
Its relative strength line has been trending sideways and dipped from its May highs.
Earnings Outlook Shows Steady Growth
The stock has climbed more than 45% from a flat-base breakout a year ago, even as the earnings per share line on its weekly MarketSurge chart has sloped only mildly higher.
Fiscal third-quarter earnings grew 22%, following gains of 9% and 18% in the prior two quarters. Meanwhile, Q3 sales growth ticked up to 10% from 8% and 9% in the two prior periods.
FactSet's consensus expects profit for the fiscal year ended in May to grow 15% then 10% in fiscal 2025.
Cintas stock holds a terrific IBD Earnings Stability factor of 3 out of 99, with a lower number being superior. Lastly, Cintas stock holds a 93 out of 99 IBD Composite Rating and a 95 EPS Rating.
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