In a report released today, Ian Zaffino from Oppenheimer maintained a Buy rating on Servicemaster Global Holdings (NYSE: SERV), with a price target of $65. The company’s shares opened today at $60, close to its 52-week high of $62.27.
Zaffino said:
“SERV negatively pre-announced 2Q18, as higher contract claim costs and adverse weather at AHS more than offset better than expected results at Terminix. We believe the timing of the pre-release suggests the company is trying to “lower the bar” before the spin-off of AHS. Preliminary 2Q18 revenues of $874M beat our/Street’s $855.7M/$860.6M estimates. Adjusted EBITDA of $208M missed our/Street’s $213M/ $217M estimates. The miss was primarily driven by higher contract claim costs at AHS of $22M ($16M, net of tax). Management revised FY2018 guidance which now calls for adjusted EBITDA of $680-700M ($695-710M previously) and revenues of $3,125-3,160M ($3,085-3,115M previously). As a result, we lower 2018E EBITDA to $690M, from $701M. Maintain Outperform.”
According to TipRanks.com, Zaffino is a 4-star analyst with an average return of 3.1% and a 56.0% success rate. Zaffino covers the Services sector, focusing on stocks such as Wyndham Destinations Inc, Peak Resorts, and Six Flags.
The word on The Street in general, suggests a Strong Buy analyst consensus rating for Servicemaster Global Holdings with a $63.33 average price target.
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Based on Servicemaster Global Holdings’ latest earnings release for the quarter ending March 31, the company reported a quarterly revenue of $675 million and net profit of $40 million. In comparison, last year the company earned revenue of $807 million and had a net profit of $85 million.
Based on the recent corporate insider activity of 41 insiders, corporate insider sentiment is negative on the stock. Most recently, in May 2018, Susan Hunsberger, the SVP HR of SERV sold 61,716 shares for a total of $3,531,770.
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ServiceMaster Global Holdings, Inc. engages in the provision of residential and commercial services. It operates through the following segments: Terminix, American Home Shield, and Franchise Services Group. The Terminix segment provides termite and pest control services to residential and commercial customers; as well as distributes pest control products.
