RBC Capital provided its outlook on Rollins, Inc. (NYSE:ROL), noting the company sets up well going into 2023, given the recession-resilient business model, while expanded upsell/cross-sell opportunities, sustained share gains through solid execution, and improved retention should drive above-industry growth.

The analysts expect organic growth momentum to sustain in 2023, modeling approximately 8% total organic growth composed of 7% Residential, 9% Commercial, and 10% Termite.

According to the analysts, technology adoption should drive improved technician efficiency and customer experience. They expect pricing increases to normalize (1-2% realization) in fiscal 2023. The analysts estimate operating leverage, improved efficiency, and inflationary pressures rolling over to deliver over 35% incremental margins driving approximately 130bps of 2023 EBITDA margin expansion.