Rentokil Initial (RTO) AI Stock Analysis

• Market Cap: £9.32B
• Dividend Yield: 180.62%
• Average Volume (3M): 4.46M
• Price to Earnings (P/E): 30.5
• Beta (1Y): 1.28
• Revenue Growth: 1.13%
• EPS Growth: -19.48%
• Country: UK
• Employees: 68,485
• Sector: Industrials
• Sector Strength: 95
• Industry: Specialty Business Services
• EPS (TTM): 0.09
• Shares Outstanding: 2,526,039,800
• 10 Day Avg. Volume: 4,773,182
• 30 Day Avg. Volume: 4,456,887
• PEG Ratio: -1.13
• Price to Book (P/B): 2.04
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 16.70
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: £407.14
• Price Target Upside: 9.77% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7

• Rating: 69 Neutral
• Price Target: 387.00p ▲(4.34%Upside)

Rentokil Initial's overall stock score of 69 reflects a balance of strong international growth and strategic initiatives against challenges in profitability and North American operations. The stock's valuation is high, but corporate events suggest confidence in long-term prospects. Technical indicators are mixed, suggesting cautious optimism.

Positive Factors

Leadership

The appointment of two new Non-Executive Directors adds leadership experience in multi-site B2B and B2C companies, enhancing the Board's expertise.

Valuation

The shares look 'cheap' compared to history and other 'Quality' names in the sector and closest peer Rollins, at 18x 2025e P/E.

Negative Factors

Executive Turnover

There has been significant churn at the top of the organization, with key executives like the group CFO and CEO of North America leaving within the past year.

Integration Challenges

Uncertainties from the large integration of Terminix to manage alongside the group's plan to reinvigorate US organic growth cannot rule out further downside risk to estimates through 2025.

Lead Generation

Management has noted that inbound customer leads have not improved, hindering organic growth recovery.

Rentokil Initial Business Overview & Revenue Model

Company Description

Rentokil Initial (RTO) is a leading global provider of services in pest control, hygiene, and workwear. With a presence in over 80 countries, the company specializes in delivering essential services for businesses and residential customers, ensuring safety, hygiene, and efficiency in various environments. Its core products and services include pest management solutions, hygiene services such as washroom cleaning and sanitation, and the supply and maintenance of workwear and protective gear.

How the Company Makes Money

Rentokil Initial generates revenue primarily through its three main service segments: Pest Control, Hygiene, and Workwear. The Pest Control segment provides services to eliminate and prevent pest infestations in residential, commercial, and industrial settings, often through service contracts and one-time treatments. The Hygiene segment offers a range of hygiene solutions, including washroom services, air care, and hand hygiene products, typically on a subscription or contract basis. The Workwear segment involves the rental, cleaning, and maintenance of workwear and uniforms for various industries, ensuring compliance with safety standards. The company also benefits from strategic partnerships and acquisitions that expand its service offerings and geographic reach. Additionally, Rentokil Initial invests in innovation and technology to enhance service delivery and efficiency, contributing to its competitive edge and revenue growth.

Rentokil Initial Financial Statement Overview

Summary

Rentokil Initial shows robust revenue growth and strong gross profit margins, indicating effective cost management. However, the declining net profit margin and negative free cash flow growth are concerning, suggesting challenges in expense management and cash flow sustainability. The balance sheet is stable with moderate debt levels, supporting financial stability.

Income Statement

Rentokil Initial has demonstrated a consistent growth in revenue from 2019 to 2024, with a notable revenue growth rate of 1.13% from 2023 to 2024. The gross profit margin is impressive at 83.91% in 2024, indicating strong cost control. However, the net profit margin has declined to 5.65% in 2024, down from 7.09% in 2023, reflecting potential challenges in managing expenses or increased interest costs.

Balance Sheet

The balance sheet shows a stable equity base with stockholders' equity increasing to 4,229 million in 2024. The debt-to-equity ratio is 0.97, indicating a moderate level of leverage. The return on equity is 7.26%, reflecting a decent return for shareholders. The equity ratio remains healthy at 40.06%, suggesting financial stability.

Cash Flow

Operating cash flow has decreased slightly from 737 million in 2023 to 678 million in 2024, indicating some pressure on cash generation. The free cash flow to net income ratio stands at 1.51, suggesting good cash profitability. However, the free cash flow growth rate is negative at -11.99%, pointing to potential challenges in sustaining cash flow from operations or increased capital expenditures.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.44B	5.38B	3.71B	2.95B	2.79B
Gross Profit	4.56B	1.50B	977.00M	714.80M	653.00M
EBITDA	1.10B	1.16B	747.00M	676.80M	586.50M
Net Income	307.00M	381.00M	232.00M	263.00M	186.00M
Balance Sheet
Total Assets	10.55B	11.13B	11.92B	4.32B	5.84B
Cash, Cash Equivalents and Short-Term Investments	911.00M	1.56B	2.09B	597.90M	2.34B
Total Debt	4.11B	4.73B	5.40B	1.93B	3.40B
Total Liabilities	6.33B	7.04B	7.82B	3.06B	4.71B
Stockholders Equity	4.23B	4.09B	4.10B	1.26B	1.13B
Cash Flow
Free Cash Flow	463.00M	526.00M	410.00M	403.30M	391.70M
Operating Cash Flow	678.00M	737.00M	600.00M	563.20M	544.20M
Investing Cash Flow	-373.00M	-416.00M	-1.20B	-441.10M	-327.00M
Financing Cash Flow	-752.00M	-361.00M	1.32B	-417.10M	62.20M

Rentokil Initial Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 370.90
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:RTO, the sentiment is Positive. The current price of 370.9 is above the 20-day moving average (MA) of 352.14, above the 50-day MA of 351.88, and above the 200-day MA of 366.62, indicating a bullish trend. The MACD of 4.77 indicates Negative momentum. The RSI at 63.83 is Neutral, neither overbought nor oversold. The STOCH value of 90.83 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GB:RTO.

Rentokil Initial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ITRK	80 Outperform	£7.70B	22.91	25.35%	318.61%	1.94%	16.26%
SRP	75 Outperform	£2.14B	50.60	4.71%	144.71%	-0.68%	-78.93%
MTO	75 Outperform	£1.73B	17.26	23.48%	304.10%	14.34%	-16.43%
JSG	74 Outperform	£557.99M	16.25	12.12%	2.87%	10.34%	33.59%
RTO	69 Neutral	£9.32B	30.45	7.38%	180.62%	1.13%	-19.48%
RST	67 Neutral	£372.43M	29.76	5.32%	194.43%	-0.65%	―
Sector *	65 Neutral	$11.16B	15.86	5.39%	1.92%	3.11%	-24.90%

Rentokil Initial Corporate Events

Rentokil Initial Announces Change in Major Holdings

Rentokil Initial PLC has announced a change in the nature of its holdings due to security lending, with GIC Private Limited now holding a 6.5% stake in the company. This adjustment in voting rights reflects a slight increase from previous holdings, indicating a strategic move by GIC to strengthen its influence within Rentokil Initial, potentially impacting the company’s governance and decision-making processes.

The most recent analyst rating on (GB:RTO) stock is a Buy with a £6.00 price target. To see the full list of analyst forecasts on Rentokil Initial stock, see the GB:RTO Stock Forecast page.

Rentokil Initial Announces Total Voting Rights Update

Rentokil Initial plc has announced that as of June 30, 2025, its issued share capital consists of 2,526,039,885 ordinary shares, each carrying one voting right. This update is crucial for shareholders to determine their interests in the company’s share capital under the FCA’s Disclosure Guidance and Transparency Rules.

The most recent analyst rating on (GB:RTO) stock is a Buy with a £6.40 price target. To see the full list of analyst forecasts on Rentokil Initial stock, see the GB:RTO Stock Forecast page.

Rentokil Initial Director Invests in Company Shares

Rentokil Initial plc announced that Sally Johnson, a Non-Executive Director, purchased 3,567 ordinary shares of the company at a price of £3.5085 per share on June 2, 2025. This transaction, conducted on the London Stock Exchange, reflects a personal investment by a key managerial figure, potentially signaling confidence in the company’s future performance.

The most recent analyst rating on (GB:RTO) stock is a Buy with a £6.40 price target. To see the full list of analyst forecasts on Rentokil Initial stock, see the GB:RTO Stock Forecast page.

Rentokil Initial to Sell France Workwear Business to H.I.G. Capital

Rentokil Initial plc has announced the intended sale of its France Workwear business to H.I.G. Capital for approximately €410 million, with completion expected in Q4 2025. This move allows Rentokil Initial to streamline its operations, focusing more on its core pest control and hygiene & wellbeing sectors, enhancing capital efficiency, and improving cash flow. The transaction aligns with the company’s strategy to concentrate on high-growth markets and reduce capital expenditure, while the proceeds will be used for corporate purposes including deleveraging and investment in growth opportunities.

The most recent analyst rating on (GB:RTO) stock is a Buy with a £6.40 price target. To see the full list of analyst forecasts on Rentokil Initial stock, see the GB:RTO Stock Forecast page.

Rentokil Initial CEO Increases Stake through Dividend Reinvestment

Rentokil Initial plc announced that its CEO, Andy Ransom, acquired 17,753 ordinary shares through the company’s Dividend Reinvestment Plan, with each share priced at £3.4706. This transaction, conducted on the London Stock Exchange, reflects a significant investment by a key executive, potentially indicating confidence in the company’s future performance and stability.

The most recent analyst rating on (GB:RTO) stock is a Buy with a £6.40 price target. To see the full list of analyst forecasts on Rentokil Initial stock, see the GB:RTO Stock Forecast page.

Rentokil Initial AGM 2025: Resolutions Passed Amid Shareholder Engagement

Rentokil Initial PLC held its Annual General Meeting (AGM) on May 7, 2025, where all proposed resolutions were passed. Notably, the re-election of Richard Solomons as a director saw over 20% opposition, prompting the board to engage further with shareholders. The successful passing of resolutions, including those related to director appointments and financial matters, reflects the company’s ongoing commitment to governance and shareholder engagement.

Rentokil Initial Strengthens Board with New Non-Executive Directors

Rentokil Initial has announced the appointment of two new Non-Executive Directors, Leanne Sheraton and Sam Mitchell, effective June 1, 2025. These appointments aim to enhance the company’s board with extensive experience in marketing, brand development, and leadership in North American multi-site businesses. The changes are expected to support Rentokil Initial’s strategic plans, particularly in North America, as the company continues to focus on growth and customer acquisition. Additionally, two current Non-Executive Directors, Linda Yueh and Sarosh Mistry, will be stepping down from the board.

Rentokil Initial CEO Andy Ransom to Retire by 2026

Rentokil Initial plc announced the upcoming retirement of its Chief Executive, Andy Ransom, by the 2026 AGM. Ransom, who has served as CEO for 12 years, has been pivotal in establishing the company as a global leader in pest control. The board, led by Chair Richard Solomons, has initiated the search for a successor. The company is currently prioritizing the turnaround of its underperforming North American business, while maintaining its focus on global market expansion. Ransom will continue to lead these efforts until a new CEO is appointed.

Rentokil Initial Issues $1.25 Billion in Notes to Enhance Financial Flexibility

Rentokil Initial has announced the issuance of $750 million in 5.000% Notes due 2030 and $500 million in 5.625% Notes due 2035 through its subsidiary, Rentokil Terminix Funding, LLC. The proceeds will be used to repay a term loan maturing in October 2025 and for general corporate purposes, enhancing the company’s financial flexibility and potentially strengthening its market position.