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23 stories mentioning ROLUpdated 6d ago

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Rollins' Organic Growth Cadence May Take Time to Rebuild, UBS Says

Rollins' (ROL) organic growth cadence may take time to fully rebuild after the Q2 shortfall affected the recurring and one-time businesses, UBS said in a note Thursday.The brokerage said search, digital and inbound traffic slowed in May and early June, negatively affecting both the businesses.UBS said several items are encouraging, including that it does not think the business is broken, the 2026 guidance overhang was removed and valuation in the 20x earnings before interest, taxes, depreciation and amortization range could provide some support.UBS maintained the company's neutral rating and lowered the price target to $43 from $50.Price: $38.67, Change: $-0.77, Percent Change: -1.97%

Rollins Q2 Miss Seen as Seasonal, H2 Recovery Expected, Morgan Stanley Says

Rollins' (ROL) Q2 results fell short of expectations as a slower-than-usual start to the peak summer pest season weighed on organic revenue growth, though Morgan Stanley expects performance to improve in the second half of the year.The brokerage said in a Thursday note that weaker-than-expected organic revenue growth reflected softer residential digital lead volumes, particularly at Orkin. However, lead volumes recovered in late June and remained strong through July, while healthy customer retention, pricing and underlying consumer demand point to a stronger third quarter.Morgan Stanley expects easier year-over-year comparisons and favorable El Nino-driven weather to support H2 growth but lowered its 2026 adjusted EBITDA estimate by 4% following the Q2 miss and lower expected Q3 incremental margins.Management said business trends strengthened toward the end of June and into July, according to the report.Morgan Stanley maintained its overweight rating on the stock and cut its price target to $60 from $65.Rollins shares were down 2.1% in Friday trading.Price: $38.61, Change: $-0.83, Percent Change: -2.10%

BNP Paribas Adjusts Rollins Price Target to $44 From $63, Maintains Neutral Rating

Rollins (ROL) has an average rating of overweight and mean price target of $46.75, according to analysts polled by FactSet.Price: $38.63, Change: $-0.81, Percent Change: -2.07%

JPMorgan Downgrades Rollins to Neutral From Overweight, Adjusts Price Target to $45 From $70

Rollins (ROL) has an average rating of overweight and mean price target of $46.75, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://finwires.com/en/contact)

Canaccord Genuity Cuts Price Target on Rollins to $45 From $51, Maintains Hold Rating

Rollins (ROL) has an average rating of overweight and mean price target of $57.44, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://finwires.com/en/contact)Price: $39.39, Change: $-4.08, Percent Change: -9.39%

Rollins Organic Growth Underperformed Mid-Term Guidance for 3 Consecutive Quarters, RBC Says

Rollins' (ROL) organic growth has underperformed the company's mid-term guidance for three consecutive quarters, with incremental margins falling short in seven of the last eight quarters, RBC Capital Markets said in a note Wednesday.RBC lowered its organic revenue growth expectation to 6% for fiscal 2026 and 6.5% for fiscal 2027 and 2028, respectively. The firm now expects EPS of $1.23, $1.40 and $1.60 for 2026 to 2028, respectively, compared with previous estimates of $1.15, $1.22 and $1.37, respectively.Analysts also see three headwinds for the company, including competitive concerns coming from Rentokil Initial (RTO) and Ecolab (ECL), generative AI-drive lead generation challenges amid slowing consumer-initiated digital growth, and macro pressures weighing on one-time revenue.RBC lowered its rating on the company's stock to sector perform from outperform, as well as its price target to $40 from $52.Price: $39.13, Change: $-4.34, Percent Change: -9.98%

Rollins Facing Decreased Demand Visibility After Weaker-Than-Expected Q2 Results, BofA Says

Rollins (ROL) posted weaker-than-expected Q2 results and its weaker Residential segment trends decreased visibility around a recovery and reacceleration in organic growth, BofA Securities said in a note Thursday.Rollins' Residential segment growth of 3.6% was below expectations and was "driven by weaker lead generation and possibly more volatile consumer behavior and competition," the note said.The narrative seems to have now moved beyond weather-related disruptions, and the company's management is now also pointing to factors like "softer demand within consumer-initiated lead channels," BofA said.The investment firm noted, however, that Rollins' management indicated improvements in lead generation in July, but BofA said that it is awaiting "further proof points before calling an inflection.""While lead trends improved into July, demand remains choppier and difficult to predict," the note said.BofA also said that "weakness was not uniform" as the company's Commercial segment and ancillary services stayed relatively resilient with organic growth.BofA downgraded Rollins' rating to underperform from buy and cut the company's price target to $35 from $55.Price: $39.47, Change: $-4.01, Percent Change: -9.21%

BofA Securities Downgrades Rollins to Underperform From Buy, Price Target is $35

Rollins (ROL) has an average rating of overweight and mean price target of $57.44, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://finwires.com/en/contact)

RBC Downgrades Rollins to Sector Perform From Outperform, Adjusts Price Target to $40 From $52

Rollins (ROL) has an average rating of overweight and mean price target of $58.69, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://finwires.com/en/contact)

Rollins Faces Mixed Q2 Setup as Soft Organic Growth Offsets Pest Control Strength, UBS Says

Rollins (ROL) has a mixed Q2 setup, as lower growth in one-time and ancillary work could result in a third consecutive quarter of organic growth below 7%, although the recurring pest control business remains strong, UBS Securities said in an earnings preview Wednesday.Rollins is scheduled to release its Q2 financial results on July 22.UBS said it does not believe Rollins faces any structural issues, but views the situation as a calibration issue over whether 7% to 8% organic growth is sustainable, given that trends at Rentokil (RTO) are less weak.Considering the channel commentary about slower one-time and ancillary environment, and with Rollins pointing to a slower start in April and early May, UBS lowered its Q2 organic growth estimate to 6.9% from 7.5%, according to the note.The brokerage said it expects Rollins to reiterate its organic growth guidance of 7% to 8% for 2026, noting the comparison is relatively easy in Q4. UBS lowered its 2026 organic growth estimate to 7.2% from 7.3% due to lower growth rate in Q2, the note added.UBS kept a neutral rating on Rollins and lowered its price target to $50 from $61.Price: $43.88, Change: $-0.41, Percent Change: -0.93%

Research15d ago

Citigroup Initiates Rollins at Neutral With $46 Price Target

Rollins (ROL) has an average rating of overweight and mean price target of $61.06, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://finwires.com/en/contact)

RBC Capital Adjusts Rollins Price Target to $52 From $67

RBC Capital Adjusts Rollins Price Target to $52 From $67

Rollins Seen Rebounding in Q2 as Weather Headwinds Ease, Morgan Stanley Says

Rollins (ROL) is positioned for a stronger Q2 as weather-related headwinds fade and the pest-control company enters its peak selling season, Morgan Stanley said Wednesday in a report.Morgan Stanley said it is bullish ahead of the quarter, citing positive demand signals, an expected pickup in organic revenue growth, and improving incremental margins.Organic growth is expected to rise 60 basis points to 7.2% in Q2 from Q1, with incremental margin improving to 26%, up from 9% in the prior quarter, the report said."Positive web traffic data, improved weather conditions, and positive indicators to start the selling season give us further confidence heading into the quarter," Morgan Stanley said.Winter-weather headwinds and the stock's pullback following the departure of Chief Financial Officer Ken Krause create an "attractive entry point into one of the highest-quality businesses with the most durable growth profile" in business services, the report said.Morgan Stanley cut its price target on Rollins stock to $65 from $70 and reiterated its overweight rating.Price: $44.44, Change: $+0.82, Percent Change: +1.88%

Rollins' Q2 Organic Growth, Margins to Accelerate Despite Higher Fuel Costs, RBC Says

Rollins' (ROL) organic growth in Q2 is likely to accelerate along with incremental margins despite near-term pressures from elevated fuel costs, RBC Capital Markets analysts said in a note emailed Thursday.Analysts said that Google search trends for "Pest Control" remain elevated compared with historical levels, with unique visits to pest control websites up 23% in April from a year earlier.RBC said that warmer and drier weather conditions in March and April have also likely increased pest activity, further supporting industry tailwinds.For Rollins, analysts expect margin expansion into the high-20% range in Q2, driven by accelerating organic growth, normalization of insurance and claims expenses, and operating leverage from higher volumes.RBC maintained its outperform rating and a $67 price target on the stock.Price: $46.37, Change: $+0.58, Percent Change: +1.27%

Research62d ago

Bernstein Downgrades Rollins to Market Perform From Outperform, Adjusts PT to $52 From $70

Rollins (ROL) has an average rating of overweight and mean price target of $63.80, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://finwires.com/en/contact)

Rollins' Medium-Term Outlook Backed by Pricing, Recurring Revenue, Acquisitions, RBC Says

Rollins' (ROL) medium-term outlook, shared at its investor day, is backed by steady growth from pricing, recurring revenue, and acquisitions, RBC Capital Markets said in a note Thursday.The company reaffirmed 2026 guidance of 7% to 8% organic revenue growth, 2% to 3% merger and acquisition contribution, and 25% to 30% adjusted incremental margins, while maintaining a medium-term outlook for above-market growth, double-digit earnings and free cash flow growth, 30% to 35% incremental earnings before interest, taxes, depreciation and amortization margins, and over 100% free cash flow conversion, the analyts said.The company projects double-digit earnings growth to be supported by gross margin gains from consumer price index-plus pricing, lower technician turnover, procurement and fleet efficiencies, and selling, general and administrative expense reduction from back-office modernization and a shared services operating model, the analysts added.The analysts said they model total revenue growth of about 9.7% year-over-year to $4.13 billion, including 7.1% organic growth, driven by Residential revenue of $1.84 billion, Commercial revenue of $1.37 billion, and Termite revenue of $875 million. They also estimate adjusted EBITDA of $946 million with a 22.9% margin, and adjusted earnings per share of $1.23 versus consensus of $1.24.RBC has an outperform rating and a $67 price target on Rollins.Price: $53.62, Change: $+0.20, Percent Change: +0.37%

Rollins Seen Reaffirming 2026 Outlook on Pricing Power, Customer Growth, RBC Says

Rollins (ROL) is expected to reaffirm its 2026 and medium-term outlook, supported by pricing power, customer wins and operational leverage across its pest-control businesses, RBC Capital Markets said Tuesday in a report.At an investor day on Thursday, Rollins is expected to reiterate 2026 guidance of 7% to 8% organic revenue growth, 2% to 3% growth in mergers and acquisitions, and 25% to 30% adjusted incremental margins, the report said.RBC also expects the company to restate its medium-term target for above market revenue growth, double-digit earnings growth and 30% to 35% incremental adjusted EBITDA margins.Rollins operates in a large, underpenetrated industry with favorable pricing dynamics and is positioned to expand its customer base through its diversified brand portfolio and multichannel distribution, RBC said.Efficiency gains from routing and scheduling optimization, back-office modernization, and other cost controls are also expected to support operational leverage, the report said.RBC maintained its outperform rating on Rollins stock and its $67 price target.Price: $52.50, Change: $-0.48, Percent Change: -0.92%

Research94d ago

Rothschild & Co Redburn Upgrades Rollins to Buy From Neutral, Adjusts PT to $66 From $51.90

Rollins (ROL) has an average rating of overweight and mean price target of $65.20, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://finwires.com/en/contact)

UBS Adjusts Price Target on Rollins to $61 From $58, Maintains Neutral Rating

Rollins (ROL) has an average rating of overweight and mean price target of $64.26, according to analysts polled by FactSet.(covers equity, commodity and economic research from major banks and research firms in North America, Asia and Europe. Research providers may contact us here: https://finwires.com/en/contact)Price: $56.32, Change: $-0.67, Percent Change: -1.18%

Research98d ago

Research Alert: Rollins Prints Mixed Q1 As Margins Fail To Impress

CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:ROL's Q1 results were mixed, achieving revenue growth of 10.2% Y/Y split between 6.6% organic growth and 3.6% from acquisitions. However, margin compression remained a headwind, with adjusted operating margin declining 100 bps to 16.9%. ROL faced challenges balancing growth investments while defending profitability, with the termite business remaining the standout performer at 13.5% revenue growth and 9.8% organic expansion, outpacing residential services which rose 9.3% overall but just 4.2% organically. Management attributed margin pressures to insurance/claims costs, people costs, and selling investments, with employee expenses rising to 32.0% of revenue from 31.8% and insurance costs increasing to 2.3% from 2.0%. Cash flows weakened significantly, with operating cash flow declining 19.4% and free cash flow down 20.6%, impacted by timing factors, a $40M tax credit strategy, and $9M from interest payment transitions. We see previous share price highs being elusive until margins show signs of stabilization.

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