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Rentokil Initial
(NYSE:RTO)
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Rating:57Neutral
Price Target:
$26.00
▼(-8.35% Downside)
Action:Reiterated
Date:08/06/26
Overall score reflects steady underlying profitability and consistent free cash flow, supported by a constructive earnings-call outlook on efficiency and deleveraging. These are partially offset by meaningful leverage and a weak technical picture (price below all major moving averages with negative MACD), while valuation appears only moderately supportive given a premium P/E and mid-range dividend yield.
Positive Factors
Recurring service model
Rentokil’s route-based, contract-focused business yields predictable recurring revenue and high customer retention. That installed base and cross-sell between pest and hygiene reduce revenue volatility and support durable cash flows and margin stability across economic cycles.
Negative Factors
Elevated leverage
Material reliance on debt limits financial flexibility and raises sensitivity to cash-flow shocks. With modest operating-cashflow coverage of debt and leverage only recently improving, the capital structure leaves less room for adverse cycles or larger unexpected outflows without slowing reinvestment or M&A.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring service model
Rentokil’s route-based, contract-focused business yields predictable recurring revenue and high customer retention. That installed base and cross-sell between pest and hygiene reduce revenue volatility and support durable cash flows and margin stability across economic cycles.
Read all positive factors
Rentokil Initial Key Performance Indicators (KPIs)
Any
Revenue at Constant Rates by Geography
Analyzes revenue across different regions while adjusting for currency fluctuations, highlighting stable growth areas and potential vulnerabilities in diverse markets.
Analyzes revenue across different regions while adjusting for currency fluctuations, highlighting stable growth areas and potential vulnerabilities in diverse markets.
Data provided by:
The Fly
The FlyRentokil Initial (RTO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$11.94B
Dividend Yield1.81%
Average Volume (3M)792.30K
Price to Earnings (P/E)24.9
Beta (1Y)0.65
Revenue Growth2.92%
EPS Growth43.13%
CountryUS
Employees63,388
SectorIndustrials
Sector Strength72
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)0.94
Shares Outstanding505,207,980
10 Day Avg. Volume681,139
30 Day Avg. Volume792,301
Financial Highlights & Ratios
PEG Ratio0.53
Price to Book (P/B)2.71
Price to Sales (P/S)2.15
P/FCF Ratio19.32
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$26.70Price Target Upside-5.89% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)1.4
Revenue Forecast (FY)$7.26B
Rentokil Initial Business Overview & Revenue Model
Company Description
Rentokil Initial plc is a global service provider operating across North America, the United Kingdom, Europe, Asia, and the Pacific, delivering a wide array of essential business support solutions through a route-based model. The company offers co...
How the Company Makes Money
Rentokil Initial primarily makes money by selling recurring, service-led contracts and related products across two main activities: (1) Pest Control: The company earns revenue from ongoing pest management programs (typically contract-based) that i...
Rentokil Initial Earnings Call Summary
Earnings Call Date:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Mar 04, 2027
Earnings Call Sentiment Positive
The call presented tangible progress on core financial metrics — revenue, operating profit, EPS, cash conversion and leverage — along with clear operational progress in North America and International pest control. Management was candid about persistent challenges: commercial underperformance in North America (particularly SMBs and some national accounts), a late-Q2 residential lead slowdown driven by termite leads, higher central and transformation costs, an increased termite provision and the need to simplify a complex portfolio. Leadership outlined a concrete three-priority plan (customer focus, sales & operational excellence, business simplification), new senior hires and cost-savings actions that are already delivering, but also warned that some changes will take up to two years to fully materialize. Overall the positives (growth, cash generation, reduced leverage, clear action plans and early cost-savings execution) modestly outweigh the negatives (segment weakness, higher provisions/costs, retired margin target and implementation timelines), leaving a cautiously constructive tone.Positive Updates
Revenue and Organic Growth
Half year revenue rose 4.5% to $3.589 billion with organic revenue growth of 3.6% for the 6 months ended June 30, 2026.
Negative Updates
Commercial Segment Weakness in North America
Commercial grew more slowly in the half, with quarter 2 weakness; commercial retention declined year-on-year and small/mid-size account losses increased partly due to rationalization of the legacy Terminix commercial book.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue and Organic Growth
Half year revenue rose 4.5% to $3.589 billion with organic revenue growth of 3.6% for the 6 months ended June 30, 2026.
Read all positive updates
Company Guidance
Management reiterated that full‑year profit expectations remain in line with current market consensus and that the group is on track to exceed its cash‑conversion target of >80% (H1 conversion 96%, up from 93%; free cash flow growth +12.8%), while H1 results included revenue $3.589bn (+4.5% YoY; organic +3.6%), operating profit $556m (+6.6%), EPS +8.3%, net debt reduction $75m and leverage 2.4x (target 2.0–2.5x). They upgraded full‑year one‑off/adjusting cash costs to $110–120m (H1 cash impact $70m), reduced M&A spend guidance to $120m (H1 bolt‑on spend $39m for 14 deals generating $26m of prior‑year revenue), increased expected cash outflows from the legacy termite provision to $115–125m (added $44m in H1), expect central costs growth to moderate to low double digits for the year, and raised the interim dividend by 8%.Rentokil Initial Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
56
Neutral
Cash Flow
64
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 7.14B | 6.91B | 5.44B | 5.38B | 3.71B | 2.95B |
| Gross Profit | 995.40M | 2.27B | 726.00M | 4.45B | 3.01B | 728.72M |
| EBITDA | 1.39B | 1.51B | 990.00M | 1.16B | 748.00M | 580.00M |
| Net Income | 477.69M | 470.44M | 307.00M | 381.00M | 232.00M | 263.00M |
Balance Sheet | ||||||
| Total Assets | 14.64B | 14.41B | 10.55B | 11.13B | 11.92B | 4.32B |
| Cash, Cash Equivalents and Short-Term Investments | 2.49B | 2.32B | 927.00M | 1.55B | 2.17B | 670.00M |
| Total Debt | 6.18B | 6.12B | 4.14B | 4.73B | 5.40B | 1.97B |
| Total Liabilities | 9.09B | 8.93B | 6.33B | 7.04B | 7.82B | 3.06B |
| Stockholders Equity | 5.55B | 5.49B | 4.23B | 4.09B | 4.10B | 1.26B |
Cash Flow | ||||||
| Free Cash Flow | 769.58M | 769.72M | 507.00M | 526.00M | 414.00M | 407.20M |
| Operating Cash Flow | 929.09M | 977.92M | 678.00M | 737.00M | 604.00M | 567.10M |
| Investing Cash Flow | 105.66M | 21.02M | -373.00M | -416.00M | -1.20B | -441.00M |
| Financing Cash Flow | -588.07M | 27.03M | -752.00M | -361.00M | 1.32B | -417.10M |
Rentokil Initial Technical Analysis
Negative
28.37
Price Trends
28.07
Negative
30.12
Negative
29.77
Negative
Market Momentum
-1.42
Positive
30.83
Neutral
25.77
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RTO, the sentiment is Negative. The current price of 28.37 is above the 20-day moving average (MA) of 26.09, above the 50-day MA of 28.07, and below the 200-day MA of 29.77, indicating a bearish trend. The MACD of -1.42 indicates Positive momentum. The RSI at 30.83 is Neutral, neither overbought nor oversold. The STOCH value of 25.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for RTO.
Rentokil Initial Risk Analysis
Rentokil Initial disclosed 27 risk factors in its most recent earnings report. Rentokil Initial reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Rentokil Initial Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $2.96B | 24.87 | 7.08% | ― | 14.32% | 22.61% | |
67 Neutral | $2.82B | 18.44 | 8.94% | 2.38% | 6.53% | 107.41% | |
67 Neutral | $4.98B | 43.32 | 5.32% | 0.49% | 1.41% | -22.01% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
59 Neutral | $447.92M | -17.46 | -2.81% | ― | 12.33% | -160.91% | |
57 Neutral | $11.94B | 24.88 | 5.82% | 2.18% | 2.92% | 43.13% | |
51 Neutral | $1.09B | -48.00 | 0.65% | ― | 1.45% | -716.67% |
* Industrials Sector Average
RTO
Rentokil Initial
23.84
0.13
0.53%
ABM
ABM Industries
48.13
1.59
3.42%
ACTG
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4.59
1.29
39.09%
CBZ
CBIZ
54.46
-7.99
-12.79%
UNF
UniFirst
286.76
113.26
65.27%
BV
BrightView Holdings
11.74
-2.72
-18.81%
Rentokil Initial Corporate Events
Rentokil Initial Discloses Janus Henderson Stake Cut Below 5% Threshold
Aug 4, 2026
On 30 July 2026, Rentokil Initial disclosed that Janus Henderson Group Ltd reduced its holding in the company, crossing a regulatory threshold for major shareholdings. The position, notified to Rentokil on 3 August 2026 and filed with the U.S. SEC...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.