Cintas (NASDAQ:CTAS) Margins to Remain Under Pressure

Reviewing the quarterly report of Cintas (NASDAQ:CTAS), the lower margins in the near term and little expectations of earnings growth makes them seem to be an overvalued company at this time.

Barclays (NYSE:BCS) said, "Last night, Cintas reported mixed 2Q results, with revenue nicely above estimates but weaker margins and in-line EPS. It also reiterated prior FY'11 guidance. While results are stabilizing, we expect minimal earnings growth and falling cash flows in FY'11 and find the shares overvalued at a big premium vs. the market multiple. As a result, we reiterate our rating. We prefer ManPower (NYSE:MAN) as better cyclical recovery play." (lowers FY11 EPS estimate from $1.55 to $1.53).

Barclays reiterates an "Underweight" rating on Cintas, which closed Wednesday at $28.30, down $0.90, or 3.08 percent. Barclays has a price target of $24 on them.