Rollins downgraded to neutral at Piper due to impact from agentic AI
Rollins Inc. (ROL) was downgraded to neutral from overweight at Piper Sandler due to agentic AI and private equity investments in the pest control sector.
Agentic AI search seems to favor small/local pest control providers over national companies, Piper Sandler analyst Peter Keith wrote in a note late Wednesday. Additionally, increased private equity investment in this sector is creating a more competitive environment for Rollins (ROL).
"Given the previously mentioned concerns, we are no longer confident that ROL has a clear path back to its targeted organic growth rate of 7%-8%," Keith, who lowered his price target on Rollins from $46 to $33, wrote. "As a consequence, we believe the stock price (and valuation) will remain range-bound, and we cannot recommend ROL shares."
Shares of Rollins (ROL) have fallen more than 45% this year.
Agentic AI search seems to favor small/local pest control providers over national companies, Piper Sandler analyst Peter Keith wrote in a note late Wednesday. Additionally, increased private equity investment in this sector is creating a more competitive environment for Rollins (ROL).
"Given the previously mentioned concerns, we are no longer confident that ROL has a clear path back to its targeted organic growth rate of 7%-8%," Keith, who lowered his price target on Rollins from $46 to $33, wrote. "As a consequence, we believe the stock price (and valuation) will remain range-bound, and we cannot recommend ROL shares."
Shares of Rollins (ROL) have fallen more than 45% this year.