From Morningstar: 2024-09-11 07:01:00

Shares in Rentokil Initial (RTO) dropped by 18% due to a slowdown in North American business, leading to lower adjusted operating profits. Revenue growth in North America is now expected to be just 1%. Despite this, equity analyst Grant Slade sees potential for a turnaround, maintaining a fair value estimate of £6.20.

Rentokil’s adjusted profit before tax and amortization is projected to be £700 million in 2024, down from previous estimates. This decrease is attributed to lower growth expectations and cost increases, impacting the company’s financial performance.

The company’s market capitalization decreased by over £2 billion following the share price drop. Activist investor Nelson Peltz’s involvement through Trian Partners aims to enhance shareholder value, suggesting possible changes to improve Rentokil’s performance and profitability.

Despite the challenges faced by Rentokil, analysts remain optimistic about the company’s potential for growth in the North American market. With strategic investments and a focus on organic growth, there is hope for a recovery in the future to drive shares back up.



Read more at Morningstar: Rentokil Shares Plummet On Profit Warning