Rollins Organic Growth Underperformed Mid-Term Guidance for 3 Consecutive Quarters, RBC Says

MT Newswires Live
Jul 23

Rollins' (ROL) organic growth has underperformed the company's mid-term guidance for three consecutive quarters, with incremental margins falling short in seven of the last eight quarters, RBC Capital Markets said in a note Wednesday.

RBC lowered its organic revenue growth expectation to 6% for fiscal 2026 and 6.5% for fiscal 2027 and 2028, respectively. The firm now expects EPS of $1.23, $1.40 and $1.60 for 2026 to 2028, respectively, compared with previous estimates of $1.15, $1.22 and $1.37, respectively.

Analysts also see three headwinds for the company, including competitive concerns coming from Rentokil Initial (RTO) and Ecolab (ECL), generative AI-drive lead generation challenges amid slowing consumer-initiated digital growth, and macro pressures weighing on one-time revenue.

RBC lowered its rating on the company's stock to sector perform from outperform, as well as its price target to $40 from $52.

Price: 39.13, Change: -4.34, Percent Change: -9.98

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