In a report released today, Joshua Chan from UBS maintained a Hold rating on Rollins, with a price target of $61.00.
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Joshua Chan’s rating is based on a combination of factors that suggest a balanced outlook for Rollins as they approach their third-quarter results. Despite some cooler-than-normal weather in parts of the East and Midwest in August, industry contacts indicate that this did not significantly affect demand, which remains robust. Chan has slightly reduced the organic growth estimate for Q3 to 7.5% from 7.8% to account for potential weather-related disruptions, but overall, the growth and EBITDA estimates are still slightly above market expectations.
Furthermore, the pest control market shows resilience with improved retention rates and strong new business sales, while pricing traction remains solid with price increases around 4% and stable customer acquisition costs. Although Orkin’s web traffic saw a slight year-over-year decline in July and August, it improved from the previous quarter, and digital advertising spending was notably higher in August compared to last year. These elements contribute to Chan’s Hold rating, reflecting a cautious yet optimistic view of Rollins’ performance.
Chan covers the Industrials sector, focusing on stocks such as ARAMARK Holdings, ManpowerGroup, and Comfort Systems. According to TipRanks, Chan has an average return of 6.0% and a 53.85% success rate on recommended stocks.