Rollins' (ROL) medium-term outlook, shared at its investor day, is backed by steady growth from pricing, recurring revenue, and acquisitions, RBC Capital Markets said in a note Thursday.

The company reaffirmed 2026 guidance of 7% to 8% organic revenue growth, 2% to 3% merger and acquisition contribution, and 25% to 30% adjusted incremental margins, while maintaining a medium-term outlook for above-market growth, double-digit earnings and free cash flow growth, 30% to 35% incremental earnings before interest, taxes, depreciation and amortization margins, and over 100% free cash flow conversion, the analyts said.

The company projects double-digit earnings growth to be supported by gross margin gains from consumer price index-plus pricing, lower technician turnover, procurement and fleet efficiencies, and selling, general and administrative expense reduction from back-office modernization and a shared services operating model, the analysts added.

The analysts said they model total revenue growth of about 9.7% year-over-year to $4.13 billion, including 7.1% organic growth, driven by Residential revenue of $1.84 billion, Commercial revenue of $1.37 billion, and Termite revenue of $875 million. They also estimate adjusted EBITDA of $946 million with a 22.9% margin, and adjusted earnings per share of $1.23 versus consensus of $1.24.

RBC has an outperform rating and a $67 price target on Rollins.

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