Bank of America Securities analyst Simona Sarli upgraded the rating on Rentokil Initial to a Buy today, setting a price target of p510.00.
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Simona Sarli has given his Buy rating due to a combination of factors linked to valuation, earnings growth, and improving execution. He highlights that Rentokil Initial’s share price weakness has created an attractive entry point, with the stock now trading at a discount to its historical earnings multiple despite management guiding to a solid low‑teens EPS growth profile through 2028. With clearer progress on integrating the Terminix acquisition and upgraded earnings forecasts that now sit above consensus for 2026–2027, he sees room for the market to re-rate the shares and justifies a higher price objective.
Sarli also underpins his Buy thesis with operational and structural drivers that support margin expansion and long-term growth. He argues that the North American business can reach its 20%+ margin goal by 2027 through cost efficiencies, better staff retention, and productivity gains from offshoring and automation, as well as improved marketing and digital lead generation that is closing the gap with key competitors. In parallel, he notes that Rentokil operates in a defensive, non-discretionary pest control market that has historically grown faster than GDP and still has significant untapped potential in U.S. residential and termite services, where penetration remains low but outsourcing is steadily rising. Together, these elements underpin his view that the risk/reward is compelling and support his upgrade to Buy.
In another report released on December 11, Bernstein also maintained a Buy rating on the stock with a p570.00 price target.