Following Cintas' Revised Full-Year Guidance, We Plan to Raise Our Fair Value Estimate Slightly

Wide-moat Cintas reported strong fiscal 2023 first-quarter results. We plan to raise our $284 fair value estimate by roughly 2%-4% to reflect full-year guidance better than the run rate previously embedded in our model, as well as the time value of money. Management lifted its revenue and earnings per share guidance to about $8.63 billion and $12.48 at their respective midpoints, or up roughly 1% and 3% from prior guidance. Nonetheless, our long-term view is unchanged. From a competitive standpoint, we believe Cintas enjoys a cost advantage over competitors thanks to its unmatched route density. But despite our positive view of the business, we think the stock remains meaningfully overvalued.