02:49 PM EST, 12/16/2024 (MT Newswires) -- Cintas ( CTAS ) is expected to post a "modest" beat when it reports fiscal Q2 earnings and revenue, with the magnitude of the beat expected lower versus prior quarters due to "high expectations" and "timing headwinds" tied to hurricanes and the presidential election, RBC Capital Markets said in an earnings preview Monday.

"We believe margin expansion will continue to be driven by Cintas' ( CTAS ) digital transformation, including the SmartTruck initiative, topline growth, and operational improvements," the investment firm said.

RBC expects a potential increase in the company's fiscal 2025 organic revenue growth guidance driven by favorable exposure to healthcare, hospitality, education, and government verticals, alongside operating leverage and share buybacks.

The company's revenue is more resilient to economic slowdowns compared to previous downturns because of greater service revenue mix, diversification into defensive verticals and strong cross-selling potential, according to the note.

Cintas ( CTAS ) is due to report fiscal Q2 results on Dec. 19.

The brokerage has a sector perform rating on Cintas' ( CTAS ) stock with a price target of $215.

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