Rollins Upgraded to Outperform at RBC Capital

Analysts at RBC Capital upgraded Rollins, Inc. (NYSE:ROL) to outperform from sector perform, noting that aggressive pricing, strong advertising push, and expanded cross-selling opportunities given fully- staffed technician levels, along with secular trends, namely warmer weather, greater outsourcing propensity, and migration to warmer/ wetter states, should drive robust revenue growth.

According to the analysts, inflationary pressures (fuel, M&S, tight labor market) rolling over, along with the BOSS digitalization initiative driving improved route density and normalization of H2/22 advertising spending, should drive margin expansion starting Q4/22. Additionally, there is potential for accelerated accretive M&A given the roughly net cash position.