Jefferies ups Rentokil price target, stays at ‘buy’

Jefferies upped its price target on Rentokil Initial on Wednesday to 740p from 640p after it hosted the company’s management at its ‘Key Drivers Conference’ this week.

"Overall we came away from meetings upbeat, with encouraging progress on the Terminix integration reiterated, increased confidence on mid-term margin opportunity, and resilient nearer-term activity continuing," the bank said.

"We use this opportunity to update estimates post 1Q results last month, increasing our target price to 740p and maintaining our buy rating."

Jefferies said management comments point to solid trends reported at the first quarter continuing into the start of the spring season.

"Confidence around pricing pass through remains strong, with cost inflation still being offset comfortably and an expectation that easing energy cost will help to moderate increases required in 2H," it said.

It added that comments around broader macro risk and resilience remain encouraging, with management seeing no signs in the business of slowing activity, including the Ambius business which would typically be an early indicator.