Rentokil Initial (RTO) AI Stock Analysis

• Market Cap: £11.12B
• Dividend Yield: 1.68%
• Average Volume (3M): 6.35M
• Price to Earnings (P/E): 43.5
• Beta (1Y): 1.14
• 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: £473.22
• Price Target Upside: 6.97% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 70 Outperform
• Price Target: 448.00p ▲(1.27% Upside)

Rentokil Initial's overall stock score is driven by strong financial performance, particularly in revenue growth and cost management, and positive technical indicators suggesting bullish momentum. However, the high P/E ratio indicates the stock may be overvalued, which tempers the overall score.

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 (RTO) is a global leader in pest control and hygiene services, operating across multiple sectors including commercial, residential, and industrial markets. The company provides a wide range of services, including pest control, hygiene and washroom services, and specialized services such as disinfection and property care. With a strong presence in over 70 countries, Rentokil Initial focuses on delivering innovative solutions to protect customers from pests and improve hygiene standards, ensuring safe and healthy environments.

How the Company Makes Money

Rentokil Initial generates revenue primarily through its pest control and hygiene services, which are offered on a contractual basis or as one-off service calls. The company's revenue model is driven by recurring service contracts, where customers pay for ongoing pest management and hygiene solutions, providing a stable and predictable income stream. Key revenue streams include residential pest control, commercial pest management, washroom hygiene services, and disinfection services, particularly following increased demand due to health and safety concerns. Additionally, Rentokil Initial benefits from strategic partnerships with businesses and organizations that require integrated pest management and hygiene solutions, further enhancing its earnings potential. The company also invests in technology and innovation to improve service efficiency and effectiveness, contributing to customer retention and growth in revenue.

Rentokil Initial Financial Statement Overview

Summary

Rentokil Initial shows strong revenue growth and effective cost management with high gross profit margins. However, challenges are present with declining net profit margins and negative free cash flow growth, indicating potential issues in expense management and cash flow sustainability. The balance sheet remains healthy with moderate debt levels 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: 442.40
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• 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 442.4 is above the 20-day moving average (MA) of 405.71, above the 50-day MA of 381.85, and above the 200-day MA of 362.01, indicating a bullish trend. The MACD of 14.58 indicates Negative momentum. The RSI at 75.67 is Negative, neither overbought nor oversold. The STOCH value of 54.81 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	―	£557.58M	16.34	12.46%	3.01%	6.55%	18.44%
SRP	―	£2.55B	53.63	5.21%	1.38%	0.84%	-62.73%
ITRK	―	£7.82B	22.53	29.71%	3.15%	1.14%	17.74%
RTO	―	£11.12B	43.50	5.93%	1.68%	-1.58%	-34.64%
MTO	―	£2.11B	19.98	23.48%	2.63%	14.34%	-16.43%
Sector *	―	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
RST	―	£325.19M	34.62	4.01%	2.53%	6.90%	145.00%

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.

The most recent analyst rating on (GB:RTO) stock is a Hold with a £380.00 price target. To see the full list of analyst forecasts on Rentokil Initial stock, see the GB:RTO Stock Forecast page.

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.

The most recent analyst rating on (GB:RTO) stock is a Sell with a £2.84 price target. To see the full list of analyst forecasts on Rentokil Initial stock, see the GB:RTO Stock Forecast page.

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.

The most recent analyst rating on (GB:RTO) stock is a Hold with a £381.00 price target. To see the full list of analyst forecasts on Rentokil Initial stock, see the GB:RTO Stock Forecast page.

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.

The most recent analyst rating on (GB:RTO) stock is a Hold with a £381.00 price target. To see the full list of analyst forecasts on Rentokil Initial stock, see the GB:RTO Stock Forecast page.

Rentokil Initial Announces Interim Dividend for 2025

Rentokil Initial plc announced an interim dividend of 4.15 cents per ordinary share for the first half of 2025, with the pence sterling amount set at 3.08 pence per share based on recent exchange rates. This dividend reflects the company’s ongoing commitment to returning value to shareholders and may influence its financial positioning and stakeholder relations.

The most recent analyst rating on (GB:RTO) stock is a Hold with a £390.00 price target. To see the full list of analyst forecasts on Rentokil Initial stock, see the GB:RTO Stock Forecast page.

Rentokil Initial Reports Solid H1 2025 Performance and Strategic Progress

Rentokil Initial reported a solid performance for the first half of 2025, with a 3.1% increase in group revenue and a strong free cash flow conversion rate of 93%. The company is seeing positive results from its sales and marketing initiatives in North America, particularly in organic lead generation, and plans to continue its integration efforts to achieve cost reductions and improve operating margins. Despite some declines in operating profit and basic EPS, the company’s strategic focus on organic growth and integration is expected to align with market expectations for the year.

The most recent analyst rating on (GB:RTO) stock is a Buy with a £520.00 price target. To see the full list of analyst forecasts on Rentokil Initial stock, see the GB:RTO Stock Forecast page.