Rentokil Shares Rise After Bernstein Double Upgrade to Outperform

Rentokil Initial (LON: RTO) shares rose sharply on Tuesday after Bernstein double upgraded the pest control and hygiene group to Outperform from Underperform, citing signs of improving organic revenue growth.

The firm also lifted its price target to 570 pence from 313 pence, suggesting renewed confidence in the company’s recovery trajectory.

Analyst Will Kirkness said Rentokil’s organic growth could accelerate to between 3% and 5%, supported by a healthier market backdrop and the benefits of ongoing strategic investments.

“We see signs of inflecting organic revenue growth,” Kirkness wrote, noting that improving execution and supportive industry trends are starting to feed through to the company’s performance.

Shares in Rentokil jumped 3.9% on Tuesday following the upgrade and edged 0.3% higher on Wednesday, extending their gains as investors welcomed the more optimistic outlook.

The upgrade marks a sharp reversal in Bernstein’s stance from May, when the broker cut its rating to Underperform, warning of execution risks in Rentokil’s North American pest control business. Since then, the company has taken steps to stabilise operations, and sentiment has gradually improved.

Other analysts have also been moderately positive in recent months. Deutsche Bank raised its target to 435 pence in July while maintaining a Buy rating, and RBC Capital reiterated its Outperform rating in June with a target of 440 pence.