Cintas' (CTAS) incremental earnings before interest and taxes margins are set to accelerate in fiscal Q4 as implied by the company's upgraded fiscal 2026 guidance, UBS Securities said in a Wednesday note.

The company reported fiscal Q3 earnings of $1.24 per diluted share, up from $1.13 a year earlier, as revenue rose to $2.84 billion from $2.61 billion.

In addition, Cintas raised its fiscal 2026 adjusted diluted EPS outlook to between $4.86 and $4.90, from $4.81 to $4.88 previously, and revenue guidance to $11.21 billion to $11.24 billion, from $11.15 billion to $11.22 billion.

UBS said Cintas' fiscal Q3 results were strong, with an organic growth beat, as well as solid retention rates and new business sales. Margins, however, were "slightly softer" due to higher selling, general and administrative expenses, the brokerage noted.

Fiscal Q4 is still expected to see strong underlying momentum and margins, UBS said as it raised estimates for the company's fiscal 2026 and 2027 EPS. The brokerage now projects fiscal 2026 EPS of $4.89 from $4.84, and fiscal 2027 EPS of $5.27 from $5.24.

UBS lowered its price target on Cintas to $228 from $235, with a buy rating.

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