Oppenheimer Reiterates Perform Rating on Cintas Corp. (CTAS)

Oppenheimer is out with a research report this morning, where it reiterates its Perform rating on CarMax Inc. CTAS; it has a $34.00 price target on the stock. The Oppenheimer analysts cited the company's recent quarterly earnings results, which were in-line with consensus, though below their own estimates. The reported operating margin of 10.9% was below their 12.3% estimate on higher than expected cost of Rentals and SG&A, partly offset by lower cost of Other Services. The analysts noted that they would be opportunistic on dips considering CTAS's stabilization/gradual build, high single digit FCF yield and strong balance sheet. As for valuation, the analysts remarked, “At 17.4x our CY11E EPS of $1.68, CTAS trades at approximately a 3.5 point premium to the S&P 500. We see modest near-term upside potential given the existing market premium stemming from gradual top-line improvement.”