Tomohiko Sano, an analyst from J.P. Morgan, has initiated a new Buy rating on Rollins (ROL).
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Tomohiko Sano has given his Buy rating due to a combination of factors that highlight Rollins’ strong market position and growth potential. The company benefits from a robust business model, with approximately 80% of its revenue stemming from recurring service contracts, which provides stability and predictability in earnings. Additionally, the U.S. pest control industry is significantly under-penetrated, with only about 15% household penetration, offering Rollins a substantial opportunity for long-term growth.
Rollins is expected to achieve double-digit EPS growth over the next few years, driven by organic revenue growth, margin expansion, and strategic acquisitions. The company’s strong brand, extensive scale, and high service quality set it apart from local competitors. Furthermore, Rollins’ valuation is supported by its consistent cash flow generation and conservative leverage, with near-term catalysts such as ERP implementation and international expansion poised to enhance shareholder value. These elements collectively underpin Sano’s optimistic outlook and Buy rating for Rollins’ stock.
Based on the recent corporate insider activity of 67 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of ROL in relation to earlier this year.