Servicemaster Global Holdings (SERV) Gets a Buy Rating from Oppenheimer


Oppenheimer analyst Ian Zaffino maintained a Buy rating on Servicemaster Global Holdings (NYSE: SERV) yesterday and set a price target of $65. The company’s shares closed on Friday at $60.27, close to its 52-week high of $62.27.

Zaffino said:

“SERV remains a top pick. The spin-off of AHS (aka frontdoor) is on track for mid-to-late September. frontdoor will host an 12th, which will be the new CEO Rex Tibbens’ first large-scale presentation. We anticipate Tibbens to flesh- out his growth acceleration plans and how he will expand frontdoor’s addressable market meaningfully. Separately, we expect Terminix to continue its turnaround and for the stock’s valuation to close a portion of the large gap with peer Rollins Inc. When-issued trading is expected on September 13th (NASDAQ: “FTDR”), and our current valuation assumes independent valuations of $24 for frontdoor and $41 for legacy SERV. To account for dis-synergy guidance, we adjust 2018E/2019E EBITDA to $680M/$740M from $690M/$760M. Maintain Outperform.”

According to TipRanks.com, Zaffino is a 4-star analyst with an average return of 3.8% and a 57.4% success rate. Zaffino covers the Services sector, focusing on stocks such as Wyndham Destinations Inc, Peak Resorts, and CDK Global.

Servicemaster Global Holdings has an analyst consensus of Strong Buy, with a price target consensus of $68.33.

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Based on Servicemaster Global Holdings’ latest earnings release for the quarter ending June 30, the company reported a quarterly revenue of $874 million and net profit of $96 million. In comparison, last year the company earned revenue of $807 million and had a net profit of $85 million.

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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.

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