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William Blair: Bullish Rollins, ServiceMaster Stances Supported By Creepy, Crawly Growth Opportunity

William Blair: Bullish Rollins, ServiceMaster Stances Supported By Creepy, Crawly Growth Opportunity
Related ROL
Benzinga's Top Upgrades, Downgrades For May 31, 2018
ServiceMaster A Leader In 'Recession-Resistant' Pest Control, Buckingham Says In Positive Initiation
Benzinga's Top Upgrades, Downgrades For May 9, 2018
Earnings Scheduled For February 12, 2018

As the U.S. pest control market — and the population it treats — grows, Rollins, Inc. (NYSE: ROL) and ServiceMaster Global Holdings, Inc. (NYSE: SERV) are well-positioned for organic growth and consistent cash flow, according to William Blair. 

The Analyst

Analyst Tim Mulrooney initiated coverage on pest control providers Rollins and ServiceMaster with an Outperform. 

The Thesis

Rollins is the largest commercial pest control service provider in the U.S., servicing over 2 million customers in 900 locations internationally. The company has generated 5-percent organic revenue growth over the past five years and has the opportunity for more than 15-percent upside over the next 18-24 months, Mulrooney said in a Monday note.

Rollins has "ample runway" for further growth driven by factors such as growing mosquito and bed bug opportunities, international initiatives and increased efficiency from IT investments, the analyst said. 

ServiceMaster provides pest control services through the Terminix brand, which is the largest residential termite control provider in the U.S., accounting for 21 percent of the North American pest control market share, Mulrooney said. While growth has slowed in recent years, Mulrooney said ServiceMaster's turnaround initiatives pave the way for renewed growth opportunity in 2018.

Price Action

At the time of publication, shares of Rollins were trading down 1.07 percent at $49.70, while shares of ServiceMaster were down 0.47 percent at $52.71. 

Related Link:

Benzinga's Top Upgrades, Downgrades For January 30, 2018 

Latest Ratings for ROL

Jun 2018NomuraMaintainsBuyBuy
May 2018Stifel NicolausInitiates Coverage OnHold
May 2018BuckinghamInitiates Coverage OnNeutral

View More Analyst Ratings for ROL
View the Latest Analyst Ratings

Posted-In: Pest Control pesticide Terminix Tim Mulrooney William BlairAnalyst Color Initiation Analyst Ratings Best of Benzinga


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