Rentokil Initial: Increased investment in North America delays, rather than destroys, planned margin progress

研报英文原文证据摘录

Rentokil Initial: Increased investment in North America delays, rather than destroys, planned margin progress

C A Z E N O V E Europe Equity Research

30 July 2026

Rentokil Initial Overweight

RTO.L, RTO LN

Increased investment in North America delays, rather Price (30 Jul 26):352p

than destroys, planned margin progress ▼Price Target (Dec-27):431p Prior (Dec-27):477p

After a number of years of integration-related challenges, the 2H25 performance

of Rentokil’s North America business had created a feeling of optimism that the European Business Services

corner had finally been turned and that while there was still some work to do to Jane L Sparrow AC

return North America to MSD organic growth, the business was entering a phase (44-20) 3493-7101

of improving organic growth, positive margin development and lower ‘one-off’ jane.sparrow@jpmorgan.com

J.P. Morgan Securities plc

cash costs. 1H26 results represent a setback to this view with the abandonment of

the FY27 North America 20% margin target, weak performance in North America

residential lead generation heading into peak pest season, higher cash costs relating Key Changes (FYE Dec)

to provisions and restructuring, and the new CEO highlighting fundamental issues Prev Cur Δ

in the current structure of the business that will take time to address. Medium-term Adj. EPS - 26E ($) 0.28 0.27 -4.0%

messages on growth and margin potential are positive but 2H26 and FY27 look set Adj. EPS - 27E ($) 0.31 0.29 -9.4%

to be yet another period of transition for Rentokil, nearly four years on from the

Style Exposure

acquisition of Terminix. While ‘turnaround fatigue’ and uncertainty over FY27

have been the dominant themes on results day, post the 21% share price fall and