Rollins Receives Hold Rating Amid Mixed Performance and High Valuation Concerns

Analyst Toni Kaplan of Morgan Stanley maintained a Hold rating on Rollins, boosting the price target to $58.00.

Toni Kaplan has given his Hold rating due to a combination of factors influencing Rollins’ performance. The company’s second-quarter results were generally in line with expectations, with total revenue growing by 12.1%, driven by both organic growth and acquisitions. However, the organic growth rate was slightly below consensus estimates, which may have tempered enthusiasm for a stronger rating.
Despite some positive momentum in June, which set the stage for a potentially strong third quarter, there were challenges such as seasonal fluctuations and margin pressures from auto claims. The integration of the Saela acquisition has been successful, contributing to revenue growth, but the stock’s high valuation at 31 times the 2026 EV/EBITDA suggests that Rollins needs to demonstrate consistent organic growth and margin improvements to justify a re-rating. Consequently, while the price target was raised to $58, the Hold rating reflects a cautious stance given these mixed signals.

According to TipRanks, Kaplan is a 3-star analyst with an average return of 2.5% and a 57.64% success rate. Kaplan covers the Industrials sector, focusing on stocks such as Equifax, ARAMARK Holdings, and Waste Connections.

In another report released on July 9, UBS also maintained a Hold rating on the stock with a $59.00 price target.