KeyBanc Upgrades G&K Services (GKSR) to Buy

KeyBanc upgraded G&K Services (NASDAQ: GKSR) from Hold to Buy with a price target of $37.00.

The firm comments, "We have become more favorable toward GKSR primarily due to our view that the Company has a significant cost takeout catalyst that could alone produce operating margin expansion of at least 200-250 bps over the next two to three years. Moreover, in the current macro environment that is demonstrating non-linear improvement in job creation (the primary driver for the uniform rental names) we prefer GKSR’s shares due to our view that imminent efficiency gains should drive earnings growth, regardless of the pace of recovery in employment."

The company's new its new GK OptiPro plant productivity system bolsters confidence in margin expansion, the firm said.

For an analyst ratings summary and ratings history on G&K Services click here. For more ratings news on G&K Services click here.

Shares of G&K Services closed at $30.23 yesterday.

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