Bernstein downgraded Rentokil Initial (RTO) to Underperform from Market Perform with a price target of 300 GBp, down from 365 GBp. The stock’s risk/reward “continues to build to the downside,” the analyst tells investors in a research note. The firm says the business now has job openings for a North America CEO and group CEO which points to challenges in the scale and duration of the U.S. Pest turnaround. Bernstein’s analysis of Rentokil’s “higher quality” recurring revenue business within U.S. Pest suggests a deterioration in Q1. It believes the company’s recurring earnings quality is deteriorating.
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