Shares of Rentokil Initial PLC (LSE:RTO) moved higher on Tuesday after Goldman Sachs upgraded the pest control specialist to Buy from Neutral, citing improving performance in North America and the potential for stronger long-term growth.
Rentokil’s shares rose 2.1% to 453.5 pence in London trading, outperforming a broadly flat FTSE 100.
Goldman Sachs also increased its 12-month price target to 590 pence from 515 pence, indicating around 33% upside from the previous closing price. The investment bank said improving operational execution in North America, Rentokil’s largest market, should support a gradual recovery in organic growth through 2027 following several years of integration work after the acquisition of Terminix.
According to Goldman Sachs, organic growth in North America has strengthened since the third quarter of 2025. The broker believes continued investment in branch expansion, local sales performance, customer retention initiatives and marketing will help drive further improvement. It forecasts the business will return to mid-single-digit organic growth by 2027, reducing the performance gap with competitor Rollins.
The broker also noted that the completion of the most significant stages of the Terminix integration has reduced operational disruption, allowing management to concentrate on improving execution while gradually expanding profit margins. Goldman Sachs expects the group’s EBITA margin to increase to 17.1% by 2027, supported by stronger revenue growth and ongoing efficiency savings.
In addition, Goldman Sachs slightly increased its earnings forecasts for 2027 and 2028, arguing that the recent weakness in Rentokil’s share price provides an attractive entry point for investors. The broker also expects continued deleveraging to strengthen the company’s ability to pursue further bolt-on acquisitions in the highly fragmented global pest control market.
More about Rentokil Initial PLC
Rentokil Initial PLC is a global provider of pest control, hygiene and workplace wellbeing services, operating across North America, Europe, Asia Pacific and other international markets. The company serves residential, commercial and industrial customers through a broad network of local operations and has significantly expanded its North American presence following the acquisition of Terminix.
Its strategy focuses on combining organic growth with targeted acquisitions while improving operational efficiency and customer service to strengthen its position in the global pest control industry.
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