Rollins: Durable, Defensive Growth at a Historical Valuation Discount Supports Buy Rating

In a report released today, Greg Parrish from Morgan Stanley maintained a Buy rating on Rollins, with a price target of $72.00.

Greg Parrish has given his Buy rating due to a combination of factors that, in his view, make Rollins a high-quality, durable growth story despite its elevated valuation. He characterizes Rollins as one of the strongest business services franchises, supported by secular demand trends and a business model that has historically delivered solid growth and margins. He also emphasizes that Rollins’ earnings are relatively insulated from macroeconomic swings, including labor and economic softening, and even notes resilience against broader themes such as AI disruption. Concerns from investors mainly revolve around the stock looking expensive and the perception that it is “priced for perfection,” as well as potential competitive pressure from RTO and a possible consumer slowdown.

At the same time, Parrish argues that the current valuation is more reasonable when placed in context. He notes that Rollins’ trading multiples on both earnings and EBITDA are roughly consistent with its own historical averages, even though its growth and margin outlook has improved. Moreover, he points out that the stock’s premium to the broader market is actually lower than it has been historically, which he sees as misaligned with the company’s superior fundamentals. In his view, this combination of best-in-class operating performance, defensive characteristics, and a relative valuation discount versus history creates an attractive entry point, justifying his Overweight/Buy recommendation.

In another report released today, Wells Fargo also maintained a Buy rating on the stock with a $68.00 price target.