Baird says Cintas short report 'weak and flawed,' recommends adding to positions
Baird analyst Andrew Wittmann said short-seller Spruce Point presented "a series of weak and flawed arguments which demonstrate poor understanding of the business model and the industry" in its report published this morning targeting Cintas. Of the five key topics of concern raised by Spruce Point, Wittmann said the only one he would not argue against is the stock's elevated valuation, as the shares recently have hit record valuations, but he adds that "You get what you pay for." On the allegations of fraudulent labor practices, Wittmann argues that Spruce Point is extrapolating a single inspection citation, which was an isolated incident, in a way that "succumbs to the anecdotal evidence fallacy." The analyst recommends adding to positions on any weakness and keeps an Outperform rating on Cintas with a $300 price target.