Rentokil valuation prompts Stifel upgrade to 'buy'

What Brokers Say Industry & Services Written by: Ian Lyall 07:00 Mon 05 Oct 2026 --> Edited by: Jamie Ashcroft Disclaimer No investment advice About this content Editorial Standards & Policies Share article About this content × About Ian Lyall Ian Lyall, a seasoned journalist and editor, brings over three decades of experience to his role as Managing Editor at Proactive. Overseeing Proactive's editorial and broadcast operations across six offices on three continents, Ian is responsible for quality control, editorial policy, and content production. He directs the creation of 50,000 pieces of real-time news, feature articles, and filmed interviews annually. Prior to Proactive, Ian helped lead the business output at the Daily... Read more About the publisher Proactive financial news and online broadcast teams provide fast, accessible, informative and actionable business and finance news content to a global investment audience. All our content is produced independently by our experienced and qualified teams of news journalists. Proactive news team spans the world’s key finance and investing hubs with bureaus and studios in London, New York, Toronto, Vancouver, Sydney and Perth. We are experts in medium and small-cap markets, we also keep our community up to date with blue-chip companies, commodities and broader investment stories. This is content that excites and engages motivated private investors. The team delivers news and unique insights across the market including but not confined to: biotech and pharma, mining and natural resources, battery metals, oil and gas, crypto and emerging digital and EV technologies. Use of technology Proactive has always been a forward looking and enthusiastic technology adopter. Our human content creators are equipped with many decades of valuable expertise and experience. The team also has access to and use technologies to assist and enhance workflows. Proactive will on occasion use automation and software tools, including generative AI. Nevertheless, all content published by Proactive is edited and authored by humans, in line with best practice in regard to content production and search engine optimisation. Rentokil Initial PLC ( LSE:RTO ) View Price & Profile Rentokil valuation prompts Stifel upgrade to 'buy' Published: 07:00 05 Oct 2026 EDT Stifel has upgraded Rentokil Initial PLC (LSE:RTO) , the pest-control and hygiene services group, to 'buy' from 'hold' as its valuation falls to a more than decade-low. The broker cut its price target slightly to 390p from 395p, but the new target represents about 30% upside from Rentokil’s 299p closing price on 2 October. Stifel said the share price and valuation had reached their lowest levels since 2018 and 2015, respectively, after further weakness following the company’s interim results. The broker expects North American pest-control services' organic growth to remain subdued at 0% to 2% in the third quarter, compared with 2.6% in the first half. Stifel nevertheless expects cost actions to the 2026 adjusted operating profit within the consensus range, adjusted operating profit within the consensus range, despite weaker customer lead generation. The weakness has also affected Rollins, the United States pest-control group, which told investors it had experienced greater turbulence in the third quarter and sharper declines in leads. Stifel believes some of the pressure reflects consumers shifting towards large language models for search, although it expects major pest-control operators to adapt their customer acquisition strategies. For 2027, the broker sees scope for better North American performance as smaller local branches mature and management actions on sales and operating processes begin to deliver. Stifel forecasts adjusted earnings per share growth of about 7.6% in 2027 despite cutting its 2026 and 2027 forecasts by about 2% following the sale of SOLitude Lake Management . The disposal for $230 million should also strengthen Rentokil’s balance sheet, with leverage forecast at about 2.2 times earnings before interest, tax, depreciation and amortisation by the end of 2026. Stifel added that further disposals could create room for share buybacks if leverage falls below management’s 2 to 2.5 times target range. The broker also sees potential upside from corporate action, including a primary United States listing or a private-equity takeover, if operational improvements fail to trigger a re-rating. Stifel said Rentokil’s position in a resilient pest-control market could make the business attractive to private-equity buyers, particularly while it trades at about 8.3 times enterprise value to earnings before interest, tax, depreciation and amortisation. Continue reading