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Rentokil Initial plc (RTO) Stock Verdict & Ratings | Investment Bastion

Stock Verdict·Updated 1d ago

Rentokil Initial plc

RTOMarket cap $9.90BPrice $19.9

Country🇬🇧United Kingdom

SectorIndustrials

IndustryCommercial Services

Controls pests and disinfects properties across 90+ countries, protecting homes, restaurants, and hospitals from rats, roaches, and germs. It's the world's largest pest control company, and pandemics only boosted demand for its disinfection services.

In Bastion Portfolios?

52W Return-25%Global Market +16%?

01Key Ratings

How does this stock score across Bastion factors?

Growth

Historical Revenue

Rev CAGR (3y)+15%8

Revenue Forecast

Rev CAGR (1y)+5%4

Rev CAGR (3y)+4%3

Rev CAGR (5y)+4%4

Earnings Forecast

EPS Growth Y+1+52%9

EPS Growth Y+2+9%6

EPS Growth Y+3+10%6

Quality

Margins

EBIT Margin13%5

Net Income Margin7%4

Free Cash Flow Margin11%6

Debt

Net Debt/EBITDA2.63

Efficiency

ROE6%3

ROA3%5

Earnings Stability55

GEAR+AVERAGE37

Overall rating across all five factors

Value

Price Multiples

P/E Ratio (Forward)137

P/E Ratio (Forward 3y)591

P/BV1.87

EV Multiples

EV/EBITDA Fwd97

EV/EBIT Fwd127

Yield

Free Cash Flow Yield7.8%8

Dividend Yield1.8%5

Momentum

Short term

1 month return-14%1

3 month return-34%1

YTD return-31%1

Mid term

Price vs 52wHigh58%2

1 year return-27%2

Long term

3 year return-42%1

5 year return-47%1

Risk Shield

Price Risk

Beta0.39

Volatility35%6

Free Cash Flow

Free Cash Flow Margin11%6

Free Cash Flow Yield7.8%8

Quality

ROCE8%5

Earnings Stability55

Net Debt/EBITDA2.63

02Growth

Is it actually growing, and how fast?

RTORentokil Initial

Revenue FY25$6.9B

GROWTH RATING↗

AVERAGE36 / 100

REVENUE GROWTH▾SCORE

Revenue, last 3Y, CAGR+15%8

Revenue, next 1Y+5%4

Revenue, next 3Y, CAGR+4%3

Revenue, next 5Y, CAGR+4%4

EARNINGS FORECAST▾SCORE

EPS growth, FY26E+52%9

EPS growth, FY27E+9%6

EPS growth, FY28E+10%6

GROWTH ASSESSMENT

STRENGTHS

Revenue grew 15%/yr over the last 3 years, ahead of 70% of companies worldwide.8/10

Earnings are set to grow faster than sales (EPS about 10%/yr vs revenue 4%/yr), so margins should widen.

WATCH

A mid-pack grower, ahead of 36% of companies worldwide.

Revenue is set to grow 4%/yr over the next 3 years, a little behind the market.4/10

Revenue grew 15%/yr over the last 3 years; forecasts see it cooling to 4%/yr.

Over five years revenue is set to grow 4%/yr, behind 60% of companies worldwide.4/10

WEAKNESSES

None flagged.

BOTTOM LINE

Margin Expander

A middle-of-the-pack grower that is slowing. The one thing to watch: forward revenue growth is only about average.

03Price Momentum

Is the market behind it right now?

RTORentokil Initial

Total return Current57.7%

Price return Current45.4%

MOMENTUM RATING↗

VERY WEAK2 / 100

SHORT-TERM RETURNS▾SCORE

1-month return-14%1

3-month return-34%1

YTD return-31%1

MID & LONG-TERM▾SCORE

% of 52-week high58%2

1-year return-27%2

3-year return-42%1

5-year return-47%1

MOMENTUM ASSESSMENT

STRENGTHS

None flagged.

WATCH

None flagged.

WEAKNESSES

Weak long-term results. It has been a disappointing long-term hold (-42% over three years and -47% over five), behind 90% of the market.

It's down 27% over the past year, now 42% below its 52-week high. That is lagging the market.

The stock is underperforming over the past month (-14%), over three months (-34%) and so far this year (-31%).

BOTTOM LINE

Falling Knife

Returns rank poorly over both the short and long run, and the price is still falling. Momentum is firmly negative — catching this is a bet against the tape, not with it. Wait for a base to form. The one thing to watch: the multi-year record is weak.

04Value

Are you paying a fair price for it?

Stop guessing on Rentokil Initial. Get the full investment case.

Premium

$20.75/month

Billed annually at $249/year $348

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02Growth

Is it actually growing, and how fast?

RTORentokil Initial

Revenue FY25$6.9B

GROWTH RATING↗

AVERAGE36 / 100

REVENUE GROWTH▾SCORE

Revenue, last 3Y, CAGR+15%8

Revenue, next 1Y+5%4

Revenue, next 3Y, CAGR+4%3

Revenue, next 5Y, CAGR+4%4

EARNINGS FORECAST▾SCORE

EPS growth, FY26E+52%9

EPS growth, FY27E+9%6

EPS growth, FY28E+10%6

GROWTH ASSESSMENT

STRENGTHS

Revenue grew 15%/yr over the last 3 years, ahead of 70% of companies worldwide.8/10

Earnings are set to grow faster than sales (EPS about 10%/yr vs revenue 4%/yr), so margins should widen.

WATCH

A mid-pack grower, ahead of 36% of companies worldwide.

Revenue is set to grow 4%/yr over the next 3 years, a little behind the market.4/10

Revenue grew 15%/yr over the last 3 years; forecasts see it cooling to 4%/yr.

Over five years revenue is set to grow 4%/yr, behind 60% of companies worldwide.4/10

WEAKNESSES

None flagged.

BOTTOM LINE

Margin Expander

A middle-of-the-pack grower that is slowing. The one thing to watch: forward revenue growth is only about average.

03Price Momentum

Is the market behind it right now?

RTORentokil Initial

Total return Current57.7%

Price return Current45.4%

MOMENTUM RATING↗

VERY WEAK2 / 100

SHORT-TERM RETURNS▾SCORE

1-month return-14%1

3-month return-34%1

YTD return-31%1

MID & LONG-TERM▾SCORE

% of 52-week high58%2

1-year return-27%2

3-year return-42%1

5-year return-47%1

MOMENTUM ASSESSMENT

STRENGTHS

None flagged.

WATCH

None flagged.

WEAKNESSES

Weak long-term results. It has been a disappointing long-term hold (-42% over three years and -47% over five), behind 90% of the market.

It's down 27% over the past year, now 42% below its 52-week high. That is lagging the market.

The stock is underperforming over the past month (-14%), over three months (-34%) and so far this year (-31%).

BOTTOM LINE

Falling Knife

04Value

Are you paying a fair price for it?

Stop guessing on Rentokil Initial. Get the full investment case.

Premium

$20.75/month

Billed annually at $249/year $348

✓
Stock VerdictValuation and investment strategy for 4,000+ stocks. Days of hedge fund analyst research, done in 2 minutes.
✓
RadarFind your next investment idea: top-ranked stocks across all 9 Bastion strategies.
✓
Portfolio ManagerCheck if Bastion algorithms added the stock you care about to their portfolios.

Secure via Stripe

Trusted by 1,000+ investors in our community