Rentokil Initial (RTO) AI Stock Analysis

• Market Cap: £10.75B
• Dividend Yield: 1.73%
• Average Volume (3M): 6.35M
• Price to Earnings (P/E): 42.1
• Beta (1Y): 1.03
• Revenue Growth: -1.58%
• EPS Growth: -34.64%
• Country: UK
• Employees: 68,485
• Sector: Industrials
• Sector Strength: 72
• Industry: Specialty Business Services
• EPS (TTM): 0.09
• Shares Outstanding: 2,526,039,800
• 10 Day Avg. Volume: 8,726,283
• 30 Day Avg. Volume: 6,351,505
• PEG Ratio: -1.65
• Price to Book (P/B): 2.39
• Price to Sales (P/S): 1.86
• P/FCF Ratio: 21.82
• 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: £482.50
• Price Target Upside: 12.26% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: 476.00p ▲(10.75% Upside)

Rentokil Initial's overall stock score is driven by strong technical analysis and positive corporate events, which indicate robust market momentum and strategic focus. However, the high P/E ratio suggests potential overvaluation, and financial performance highlights challenges in profitability and cash flow sustainability.

Positive Factors

Business Model Strength

The contractual revenue model ensures a stable and predictable income stream, enhancing financial stability and supporting long-term growth.

Market Position

A strong global presence and leadership position in key markets provide competitive advantages and opportunities for sustained growth.

Gross Profit Margin

High gross margins indicate effective cost control and pricing power, contributing to profitability and competitive positioning.

Negative Factors

Net Profit Margin Decline

A declining net profit margin suggests challenges in managing expenses or increased interest costs, potentially impacting future profitability.

Negative Free Cash Flow Growth

Negative free cash flow growth indicates potential challenges in sustaining cash flow from operations, affecting financial flexibility.

Revenue Growth Challenges

Slower revenue growth may indicate market saturation or competitive pressures, limiting future expansion opportunities.

Rentokil Initial Business Overview & Revenue Model

Company Description

Rentokil Initial plc, together with its subsidiaries, provides route-based services in North America, the United Kingdom, rest of Europe, Asia, the Pacific, and internationally. It offers a range of pest control services for rodents, and flying and crawling insects, as well as other forms of wildlife management for commercial and residential customers. The company also provides hygiene services, including the provision and maintenance of products, such as soap and hand sanitizer dispensers, hand dryers, air care and purification, cubicle and surface sanitizers, feminine hygiene units, toilet paper dispensers, and floor protection mats. In addition, it engages in the supply and laundering of workwear, uniforms, cleanroom uniforms, and protective equipment. Further, the company installs and services interior and exterior plant displays, flowers, replica foliage, Christmas decorations, and ambient scenting for commercial businesses; offers property care services consisting of damp proofing, property conservation, and woodworm and wood rot treatment; and provides a range of specialist cleaning services, such as graffiti removal deep cleaning of kitchens and washrooms, trauma cleaning, and flood or fire damage cleaning, as well as specialist industrial cleaning and disinfection services, including the professional and discreet disinfection of areas that have been exposed to bio-hazardous situations, such as crime and trauma scenes, prison cells, void properties, emergency vehicles, and healthcare establishments. Additionally, it offers a range of healthcare waste management services comprising the collection, disposal, and recycling of hazardous and offensive waste produced by businesses and organizations associated with the provision of healthcare; and color-coded sharps disposal bins to deal with various types of waste. Rentokil Initial plc was founded in 1903 and is headquartered in Crawley, the United Kingdom.

How the Company Makes Money

Rentokil Initial generates revenue primarily through its pest control and hygiene services. The company operates a subscription-based model for many of its services, which ensures a steady stream of recurring revenue from long-term contracts with businesses and residential customers. Key revenue streams include pest control services, where technicians provide ongoing monitoring and treatment solutions, and hygiene services, which encompass washroom maintenance, air care products, and infection prevention measures. Additionally, the company benefits from partnerships with various organizations and industries that require comprehensive pest management and hygiene solutions, further enhancing its earning potential. Factors such as the rising demand for pest control in urban areas, increased awareness of hygiene practices due to health concerns, and the expansion into emerging markets also contribute significantly to Rentokil Initial's financial performance.

Rentokil Initial Financial Statement Overview

Summary

Rentokil Initial shows strong revenue growth and effective cost management, with high gross profit margins. However, declining net profit margins and negative free cash flow growth indicate challenges in expense management and cash flow sustainability. The balance sheet is healthy with moderate debt and a good equity ratio, 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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.41B	5.44B	5.38B	3.71B	2.95B	2.79B
Gross Profit	535.50M	4.56B	1.50B	977.00M	714.80M	653.00M
EBITDA	698.00M	1.10B	1.16B	747.00M	676.80M	586.50M
Net Income	205.00M	307.00M	381.00M	232.00M	263.00M	186.00M
Balance Sheet
Total Assets	14.23B	10.55B	11.13B	11.92B	4.32B	5.84B
Cash, Cash Equivalents and Short-Term Investments	1.69B	911.00M	1.56B	2.09B	597.90M	2.34B
Total Debt	6.08B	4.11B	4.73B	5.40B	1.93B	3.40B
Total Liabilities	8.97B	6.33B	7.04B	7.82B	3.06B	4.71B
Stockholders Equity	5.27B	4.23B	4.09B	4.10B	1.26B	1.13B
Cash Flow
Free Cash Flow	475.50M	463.00M	526.00M	410.00M	403.30M	391.70M
Operating Cash Flow	616.50M	678.00M	737.00M	600.00M	563.20M	544.20M
Investing Cash Flow	-362.09M	-373.00M	-416.00M	-1.20B	-441.10M	-327.00M
Financing Cash Flow	-312.78M	-752.00M	-361.00M	1.32B	-417.10M	62.20M

Rentokil Initial Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 429.80
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

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 429.8 is above the 20-day moving average (MA) of 416.57, above the 50-day MA of 414.68, and above the 200-day MA of 367.07, indicating a bullish trend. The MACD of 5.52 indicates Negative momentum. The RSI at 62.16 is Neutral, neither overbought nor oversold. The STOCH value of 76.45 is Neutral, 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
JSG	80 Outperform	£521.59M	15.59	12.46%	3.11%	6.55%	18.44%
MTO	76 Outperform	£2.11B	21.25	20.62%	2.59%	11.42%	-17.18%
RTO	74 Outperform	£10.75B	42.06	5.93%	1.73%	-1.58%	-34.64%
ITRK	74 Outperform	£6.95B	20.07	29.71%	3.56%	1.14%	17.74%
SRP	73 Outperform	£2.50B	52.87	5.21%	1.38%	0.84%	-62.73%
RST	66 Neutral	£380.65M	40.52	4.01%	2.12%	6.90%	145.00%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Rentokil Initial Corporate Events

Rentokil Initial Reports Positive Q3 2025 Revenue Growth

Rentokil Initial reported a 4.6% increase in Group Revenues for the third quarter of 2025, driven by organic growth and strategic initiatives in North America and international markets. The company maintained strong performance in pest control and hygiene services, with a focus on improving sales execution, digital marketing, and cost efficiency. The sale of its France Workwear business was completed, contributing to a reduction in net debt, while the company continues to expect financial results in line with market expectations for the year.

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

Rentokil Initial has completed the sale of its France Workwear business to H.I.G. Capital for an enterprise value of €410 million. This strategic move allows Rentokil Initial to focus on its core pest control and hygiene & wellbeing services, enhancing cash generation and capital efficiency while reducing annual capital expenditure.

Rentokil Initial CEO Acquires Shares via Dividend Reinvestment Plan

Rentokil Initial plc announced that its Chief Executive, Andy Ransom, acquired 8,997 ordinary shares through the Company’s Dividend Reinvestment Plan (DRIP) at a price of £3.616967 per share. This transaction, conducted on the London Stock Exchange, reflects a reinforcement of confidence in the company’s financial strategies and market position, potentially impacting stakeholder perceptions positively.

Rentokil Initial Director Joins BAE Systems Board

John Pettigrew, the Senior Independent Director at Rentokil Initial, has been appointed as a non-executive director on the board of BAE Systems plc, effective from February 23, 2026. This appointment may enhance Rentokil Initial’s strategic connections and influence within the industry, potentially impacting its market positioning and stakeholder relations.