JPMorgan downgraded Rollins to Neutral from Overweight and cut its price target to $45 from $70, citing uncertainty around weakening residential demand and a slower-than-expected margin recovery. The brokerage said questions raised at Rollins' investor day outweighed the answers, particularly around the sharp slowdown in consumer-initiated demand and the timing of a margin recovery. JPMorgan analyst Tomohiko Sano lowered fiscal 2026 and 2027 revenue growth forecasts to 8.7% and 8.4%, respectively, while reducing adjusted EBITDA margin estimates to 21.9% and 22.2%. The downgrade follows a weaker-than-expected second quarter, with residential organic growth slowing to 3.6% as brands dependent on search and digital marketing saw declining lead volumes. Management has lowered its 2026 incremental EBITDA margin target to at least 10% from its longer-term framework of 30%-35%, though it expects improvement to be weighted toward the fourth quarter.
Rollins IncJPMorgan downgraded Rollins citing weakening residential demand and slower margin recovery
JPMorgan Chase & Co