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Rollins, Inc. (ROL), headquartered in Atlanta, Georgia, is a leading global provider of consumer and commercial services. Valued at a market capitalization of $24.2 billion, the company specializes in pest and wildlife control, offering termite damage prevention and protection against rodents and insects to both residential and commercial clients.
Shares of ROL have underperformed the broader market over the past year. ROL has gained 26.9% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 30.6%. However, in 2024, ROL’s stock rose 14.6%, compared to the SPX’s 23.6% rise on a YTD basis.
Zooming in further, ROL has also struggled to keep up with the iShares U.S. Consumer Focused ETF (IEDI). The exchange-traded fund has gained about 31% over the past year. Moreover, ROL’s gains on a YTD basis lag behind the ETF’s 20.9% returns over the same time frame.
On Oct. 23, ROL released its Q3 earnings, and its stock dropped 6.6% in the following trading session. While its adjusted EPS of 29 cents fell short of the market’s expectations, its revenue of $916.3 million topped Street’s forecast.
For the current fiscal year, ending in December, analysts expect Rollins’ EPS to grow 10% to $0.99 on a diluted basis. The company’s earnings surprise history is mixed. It matched the consensus estimate in three of the last four quarters while missing on another occasion.
Among the ten analysts covering ROL stock, the consensus is a “Moderate Buy.” That’s based on four “Strong Buy” ratings, one “Moderate Buy,” and five “Holds.”
This configuration is less bullish than three months ago, with five analysts suggesting a “Strong Buy.”
On Nov. 4, Barclays PLC (BCS) initiated coverage on Rollins with an “Equal-Weight” rating and a $50 price target, reflecting a neutral stance on its near-term performance. Barclays also praised the company's effective capital allocation and consistent growth in revenue, EPS, and free cash flow.
The mean price target of $50.22 represents a marginal premium to ROL’s current price levels. The Street-high price target of $56 suggests an upside potential of 11.9%.
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