RBC Capital analysts upgraded Rollins, Inc. (NYSE:ROL) to outperform from sector perform, highlighting that Q2/22 had only a partial benefit from pricing and sales momentum and could see the full benefit in Q3/22.
According to the analysts, aggressive pricing, strong advertising push, and expanded cross-selling opportunities given fully-staffed technician levels, along with secular trends, and greater outsourcing propensity, should drive robust revenue growth.
Furthermore, 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.