Wells Fargo has downgraded Rollins from equal weight to underweight and reduced its price target from $46 to $32, suggesting a nearly 19% downside from the stock's recent closing price.
Analyst Jason Haas noted that Rollins has experienced softer growth trends in its residential pest control business over the past three quarters, attributing this decline to adverse weather conditions and increased competition. Additionally, he highlighted that consumers may be becoming more price-sensitive, which could further impact demand.
The company's organic growth of 5.7% fell short of expectations, and its second-quarter earnings also missed analyst estimates. Following the release of these disappointing results, Rollins' stock dropped over 9%, marking its worst daily performance since February.
The company has also revised its fiscal year 2026 organic revenue growth guidance down to approximately 6%, from a previous range of 7% to 8%. Despite this negative outlook, 12 out of 20 analysts still maintain a buy or strong buy rating on Rollins, although the stock has underperformed significantly, down 34% year to date