Street Calls of the Week
Investing.com - JPMorgan initiated coverage on Rollins (NYSE:ROL) with an Overweight rating and a $70 price target, implying approximately 24% upside from current levels. The stock, currently trading at $56.44, has shown strong momentum with a 22.86% year-to-date return. InvestingPro data reveals the company maintains an impressive track record of 22 consecutive years of dividend raises.
The investment bank highlighted Rollins’ resilient business model, noting that approximately 80% of the company’s revenue comes from recurring service contracts, providing stability in the industrial sector. This stability is reflected in the company’s strong financial health, earning a "GOOD" rating from InvestingPro, with robust gross profit margins of 52.7% and steady revenue growth of 10.4% over the last twelve months.
JPMorgan pointed to significant growth potential in the pest control industry, which it values at over $20 billion in the U.S. alone, with current household penetration at only about 15%.
The firm’s earnings per share forecasts for fiscal years 2025-2026 stand 3-5% above consensus estimates, based on expectations for steady high-single-digit organic growth, margin expansion, and strategic bolt-on acquisitions.
JPMorgan identified Rollins’ trusted brands, strong corporate culture, and financial flexibility as key factors that should drive continued market outperformance.
In other recent news, Rollins has announced a regular quarterly cash dividend of $0.165 per share, which will be payable on September 10, 2025, to shareholders of record as of August 11, 2025. Piper Sandler has raised its price target for Rollins to $72, citing a solid and straightforward second-quarter performance with strong consumer demand. The firm maintains an Overweight rating on the company’s stock. Meanwhile, Morgan Stanley has also increased its price target for Rollins to $58 from $53, updating its financial model and maintaining an Equalweight rating. Morgan Stanley’s revised estimates suggest approximately 1% higher earnings for 2025 and 2026, considering the current valuation fair at 31 times the 2026 EV/EBITDA. Additionally, Piper Sandler has initiated coverage on Rollins with an Overweight rating and a $70 price target. The firm highlights Rollins’ transition from a family-run business to a modernized public company with a long track record of sustainable growth. These developments reflect a positive outlook from analysts on Rollins’ financial performance and strategic direction.
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