Analyst Brian McNamara from Canaccord Genuity maintained a Hold rating on Rollins and keeping the price target at $55.00.
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Brian McNamara has given his Hold rating due to a combination of factors surrounding Rollins’ current performance and future potential. The company’s management team, including CEO Jerry Gahlhoff, has demonstrated strong leadership with extensive field experience, which is a positive indicator for the company’s operational credibility. However, while Rollins has shown consistent growth with 96 consecutive quarters of expansion, the achievement of its targeted incremental margins remains inconsistent.
McNamara notes that although Rollins has managed to exceed its incremental EBITDA margin target recently, this was partly due to favorable adjustments that may not be sustainable. The company’s pricing strategy, which aims to outpace inflation, is promising, but the variability in incremental margins suggests potential volatility. Therefore, McNamara maintains a Hold rating, indicating that while the company is stable, more consistent revenue growth and margin achievement are necessary before considering an upgrade in the rating.
ROL’s price has also changed slightly for the past six months – from $56.870 to $58.770, which is a 3.34% increase.