Rollins Earnings: Robust Organic Growth Calms Investors' Pest-Control Market Concerns

Rollins’ strong third-quarter performance provided investors with a level of comfort that North American pest-control market conditions haven’t deteriorated sharply in recent months. The company delivered elevated organic growth of 8.4% year on year—largely according with our full-year 2023 organic growth expectations—outperforming the weak third-quarter North American result for wide-moat peer Rentokil Initial. Price increases more than offset inflationary pressures and worked in combination with operating leverage to continue widening Rollins’ operating margin, which rose 240 basis points to 22.3% in the third quarter and thus was tracking modestly ahead of our prior expectation for 2023 EBIT margin progression.