BIPS of Info: Time spent with ROL, CTAS & ECL (& callbacks with VSTS, WSC)

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BIPS of Info: Time spent with ROL, CTAS & ECL (& callbacks with VSTS, WSC)

Barclays | BIPS of Info

hard to be convicted about a Uniform Services company with consistently negative uniform

sales – we’ll look to see the 4Q turn to positive sales and continued progress on initiatives. We

raise our PT to $9 from $6 as a function of revising our estimates higher to raised guide ranges

for adj. EBITDA & the notable increase in FCF. We apply a multiple of ~ 7x our CY'27 VSTS adj.

EBITDA of $338mn vs. our prior ~6.5x CY'27 VSTS adj. EBITDA of $323mn. We increase our

multiple to reflect our incremental constructivism.

• WSC’s EPS call happened last week while we were on the road in Europe, but we caught

up with the team this week and were encouraged by the clean beat (Figure 3) & raise

(Figure 4) – albeit vs. conservative guide and low expectations. We think the stock price

pop (+20.5% vs. +0.8% for SPX) was partly due to low expectations & high short interest, as

WSC remains a show me, needing consistency. With that said, 1Q was a clear step up in

execution credibility, even if just incremental. From an industry perspective a few things to

call out, too:

° The turn in activations – modular now positive for two quarters and storage inflecting for

the first time since ~2022 – could confirm a bottom in key leading indicators. Yet, it's still

early-cycle: activation momentum needs to persist for several quarters before UOR

stabilize and ultimately grow, keeping the recovery gradual.

° Leasing revenue inflection in 2H26 is directionally positive but modest in magnitude –

fundamentals improving sequentially rather than snapping back. However, with (this

modest inflection &) true volume recovery still likely a 2027 event, we view this as

confirmation of direction, not arrival.