Rentokil offers "extremely good value", says RBC

RBC Capital Markets has reiterated an 'outperform' rating and 575p target price for Rentokil Initial ahead of the pest control group's full-year results next week.

"We continue to see the stock as extremely good value post its de-rating and remain at 'outperform'," the broker said.

With no updates or newsflow from Rentokil since the company's poorly received third-quarter results in October, the annual results will be closely watched on 7 March.

Shares dropped sharply at the time of the third-quarter update after the company noted softer consumer demand in North America with new residential customer acquisition being challenged by the macroeconomic backdrop.

The stock still stands 27% lower than the day before the results – trading at 432.8p by 1021 GMT, down 0.6% on the day.

"We expect in line results, with the potential for a better Q4 US run rate (given ROL commentary and website trends)," RBC said.

"Key will be the 2024 outlook – consensus has come down, we think, to realistic levels even with some incremental sales/marketing spend, but an update on the integration remains key."