Rentokil Initial (RTO)
NYSE:RTO
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Rentokil Initial
(NYSE:RTO)
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Rating:60Neutral
Price Target:
$33.00
▲(0.73% Upside)
Action:ReiteratedDate:03/07/26
The score is driven primarily by steady underlying profitability and consistent free cash flow, reinforced by constructive (though not flawless) earnings-call signals around cash conversion, leverage improvement, and cost savings. Offsetting these are the recent top-line contraction and balance-sheet leverage constraints, alongside a relatively expensive valuation and mixed technical momentum (negative MACD).
Positive Factors
Resilient EBITDA margins
Sustained EBITDA margins near 18–22% indicate a durable ability to convert revenue into operating profit. For a services business with subscription contracts, stable margins support reinvestment, fund capex/M&A and provide a cushion against cyclical revenue swings over the next 2–6 months.
Negative Factors
Recent sharp revenue drop
A large top‑line contraction weakens the revenue base that underpins recurring contract economics and margin absorption. If the decline persists it will constrain reinvestment capacity, slow deleveraging and force heavier reliance on cost cuts or M&A to restore growth over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Resilient EBITDA margins
Sustained EBITDA margins near 18–22% indicate a durable ability to convert revenue into operating profit. For a services business with subscription contracts, stable margins support reinvestment, fund capex/M&A and provide a cushion against cyclical revenue swings over the next 2–6 months.
Read all positive factors
Rentokil Initial (RTO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$17.08B
Dividend Yield2.2%
Average Volume (3M)792.30K
Price to Earnings (P/E)31.6
Beta (1Y)0.77
Revenue Growth1.56%
EPS Growth-32.50%
CountryUS
Employees68,485
SectorIndustrials
Sector Strength72
IndustrySpecialty Business Services
Share Statistics
EPS (TTM)0.65
Shares Outstanding505,207,980
10 Day Avg. Volume681,139
30 Day Avg. Volume792,301
Financial Highlights & Ratios
PEG Ratio0.54
Price to Book (P/B)2.71
Price to Sales (P/S)2.15
P/FCF Ratio19.32
Enterprise Value/Market Cap0.90
Enterprise Value/Revenue2.24
Enterprise Value/Gross Profit16.31
Enterprise Value/Ebitda11.25
Forecast
1Y Price Target
$35.00Price Target Upside6.84% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)1.45
Revenue Forecast (FY)$7.25B
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 an...
How the Company Makes Money
Rentokil Initial generates revenue through multiple streams, primarily from its pest control and hygiene service contracts. The company charges clients on a subscription basis for ongoing pest management services, which includes regular inspection...
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 Earnings Call Summary
Earnings Call Date:Mar 05, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Jul 23, 2026
Earnings Call Sentiment Positive
The call balanced clear evidence of operational recovery, solid financial and cash generation, improved margins and decisive strategic moves in North America, international markets and technology adoption against notable legacy and transformation-related costs. The largest negative item is the material increase in the termite provision and associated cash outflows and elevated one-off transformation costs. On balance, the advances in revenue, profit, cash flow, improved lead flow, and tangible efficiency delivery materially outweigh the negatives, though execution and litigation risks remain.Positive Updates
Group Revenue and Profit Growth
Group revenue increased 3.8% to $6.9 billion with organic revenue growth of 2.6%. Adjusted operating profit rose 5.4% to just over $1.0 billion, delivering an adjusted operating profit margin of 15.5% (up 30 basis points). Adjusted basic EPS increased 2.4% to $0.2591.
Negative Updates
Significant Increase in Termite Provision and Litigation Costs
The termite provision increased by $201 million across 2025 (including $122 million in H2). Cash settlements were $95 million in 2025 and management expects similar cash costs in 2026. The long-term inflation assumption for the provision was raised from 2% to 3.2%, reflecting higher legal defense, housing and materials costs.
Read all updates
Q4-2025 Updates
Positive
Negative
Group Revenue and Profit Growth
Group revenue increased 3.8% to $6.9 billion with organic revenue growth of 2.6%. Adjusted operating profit rose 5.4% to just over $1.0 billion, delivering an adjusted operating profit margin of 15.5% (up 30 basis points). Adjusted basic EPS increased 2.4% to $0.2591.
Read all positive updates
Company Guidance
Guidance focused on North America and cash/efficiency: the group plans to expand its multi‑brand strategy to ~30 regional/local brands (from 9), grow its small “satellite” branches from ~150 to ~220 (adding ~70 in 2026) and a total branch network of ~800 by end‑2026; it delivered $25m of in‑year savings in 2025 and is targeting $100m of cost reductions by 2027 while funding growth, expects gross CapEx to remain ~ $196m in 2026, targets free cash flow conversion >80% (2025 was 98% with FCF $615m), plans ~ $200m of bolt‑on M&A in 2026 (reinvested $121m in 2025), expects similar termite cash payments of ~ $95m and one‑off/transformation cash outflows of ~$80–85m in 2026, aims to reduce net debt/EBITDA toward a 2.0–2.5x range (2.6x at year‑end, net debt $3.65bn), and is targeting North America margins of around 20% next year and above 20% by 2027, with management expressing confidence in delivering 2026 results in line with market expectations.Rentokil Initial Financial Statement Overview
Summary
Income Statement
62
Positive
Balance Sheet
56
Neutral
Cash Flow
64
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 6.91B | 5.44B | 5.38B | 3.71B | 2.95B |
| Gross Profit | 945.89M | 726.00M | 4.45B | 977.00M | 714.80M |
| EBITDA | 1.51B | 990.00M | 1.16B | 748.00M | 580.00M |
| Net Income | 470.44M | 307.00M | 381.00M | 232.00M | 263.00M |
Balance Sheet | |||||
| Total Assets | 14.41B | 10.55B | 11.13B | 11.92B | 4.32B |
| Cash, Cash Equivalents and Short-Term Investments | 2.32B | 927.00M | 1.55B | 2.17B | 670.00M |
| Total Debt | 6.12B | 4.14B | 4.73B | 5.47B | 1.97B |
| Total Liabilities | 8.93B | 6.33B | 7.04B | 7.82B | 3.06B |
| Stockholders Equity | 5.49B | 4.23B | 4.09B | 4.10B | 1.26B |
Cash Flow | |||||
| Free Cash Flow | 769.72M | 507.00M | 526.00M | 414.00M | 407.20M |
| Operating Cash Flow | 977.92M | 678.00M | 737.00M | 604.00M | 567.10M |
| Investing Cash Flow | 21.02M | -373.00M | -416.00M | -1.20B | -441.00M |
| Financing Cash Flow | 27.03M | -752.00M | -361.00M | 1.32B | -417.10M |
Rentokil Initial Technical Analysis
Positive
32.76
Price Trends
31.56
Positive
30.67
Positive
27.87
Positive
Market Momentum
0.79
Negative
62.22
Neutral
70.65
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For RTO, the sentiment is Positive. The current price of 32.76 is above the 20-day moving average (MA) of 32.23, above the 50-day MA of 31.56, and above the 200-day MA of 27.87, indicating a bullish trend. The MACD of 0.79 indicates Negative momentum. The RSI at 62.22 is Neutral, neither overbought nor oversold. The STOCH value of 70.65 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
71 Outperform | $475.62M | 26.39 | 4.02% | ― | 71.28% | -89.20% | |
69 Neutral | $4.51B | 49.97 | 6.24% | 0.71% | 0.20% | 2.72% | |
65 Neutral | $2.33B | 17.89 | 8.80% | 2.20% | 4.62% | 102.72% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
60 Neutral | $17.08B | 31.61 | 6.51% | 2.20% | 1.56% | -32.50% | |
60 Neutral | $1.66B | 27.64 | 6.21% | ― | 59.19% | -35.47% | |
59 Neutral | $1.14B | -19.84 | 2.88% | ― | -3.40% | -51.58% |
* Industrials Sector Average
RTO
Rentokil Initial
33.87
11.32
50.17%
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30.00
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UNF
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263.13
93.70
55.31%
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12.47
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-4.66%
Rentokil Initial Corporate Events
Rentokil Initial Reports Small Reduction in Swedbank Robur Stake
Feb 23, 2026
Rentokil Initial disclosed on 23 February 2026 that Swedish asset manager Swedbank Robur Fonder AB has marginally reduced its shareholding in the group. The move, reported via a standard UK TR-1 major holdings notification and filed with the U.S. ...
Rentokil Initial Discloses Independent Franchise Partners’ Stake Dip Below 5% Threshold
Jan 20, 2026
On 15 January 2026, Independent Franchise Partners LLP marginally reduced its stake in Rentokil Initial plc, taking its holding below the 5% notification threshold to 4.98% of the company’s voting rights, equivalent to 125,795,910 shares, al...
BlackRock Lifts Rentokil Initial Stake to 11% of Voting Rights
Jan 16, 2026
On 14 January 2026, asset manager BlackRock Inc. increased its stake in Rentokil Initial plc, crossing a major shareholding threshold as defined under UK disclosure rules. The position, notified to the company on 15 January 2026 and disclosed in a...
Rentokil Initial Discloses Independent Franchise Partners Crossing 5% Shareholding Threshold
Jan 14, 2026
On 14 January 2026, Rentokil Initial plc reported a change in significant shareholding, disclosing that London-based asset manager Independent Franchise Partners LLP had increased its stake in the company. A regulatory filing showed that on 12 Jan...
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.