RBC says pullback in Rollins' shares creates buying opportunity
05/10/2023 09:19
** RBC Capital Markets says pullback in shares of
pest-control firm Rollins Inc ROL.N has created "attractive"
buying opportunity, following short-seller report
** Short-seller Spruce Point Capital Management says it was
short on ROL on concerns over its cash flow and leveraged
acquisitions; warns co's shares could drop 30%-40%
** RBC believes issues highlighted in short report are
either "well known or have already been addressed and resolved"
** RBC sees strong secular tailwinds, "solid" execution by
new management helping ROL
** Expects ~19% y/y earnings growth on ~8% organic revenue
growth, 30%-40% incremental operating margins, and shareholder
friendly capital allocation
** Four of nine brokerages rate stock "buy" or higher, and
five "hold"; median PT is $42 - LSEG data
** ROL down 1.6% YTD, as of last close
(Reporting by Roshan Abraham)
((Roshan.Abraham@thomsonreuters.com))