Cintas price target raised to $725 from $675 at RBC Capital

RBC Capital raised the firm’s price target on Cintas to $725 from $675 and keeps an Outperform rating on the shares after its Q3 earnigns beat and guidance raise. The company’s gross margins of 220bps significantly surprised to the upside with 34% incremental operating margins driven by solid volume growth, digital, digital transformation including SmartTruck and SAP/Google partnership, and continued operational efficiencies driven by six sigma, engineering, and supply chain teams, the analyst tells investors in a research note. Cintas has also sustained strong teens growth in First-Aid and Fire business, with ample runway, the firm added.