UBS Reiterates Neutral Rating on Rollins (ROL)

UBS analyst Joshua Chan reiterated a Neutral rating and $61.00 price target on Rollins (NYSE: ROL).

The analyst commented, " We see a balanced setup into ROL's Q3 print. Although August weather was choppier with parts of the East/Midwest cooler than normal, our industry contacts suggest this did not materially impact intra-quarter demand and overall backdrop remains strong. We trimmed our Q3 organic growth estimate marginally (to +7.5% from +7.8%) to account for some possible choppiness, but our Q3 estimates for organic growth/EBITDA are still nominally above the Street. We consider the upside potential more modest this quarter, and view setup to be largely balanced into Q3 results."

Also, "Demand backdrop remains strong. Our conversations with industry participants suggest that the pest control market remained strong in Q3. Similar to past quarters, our contacts continue to point to slightly improved retention rates yoy, indicative of the industry's resilience. Meanwhile, new business sales continue to be strong. While our contacts acknowledged the choppier weather in August (below), this did not seem to have a material impact to intra-quarter demand. Pricing traction stays solid. Industry pricing remains strong with price increases cited in the +4% range, consistent with recent quarters and also with not much customer pushback. Customer acquisition costs said to be stable yoy."

For an analyst ratings summary and ratings history on Rollins click here. For more ratings news on Rollins click here.

Shares of Rollins closed at $58.74 yesterday.

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