Rentokil Initial PLC (LSE:RTO) topped the FTSE 100 leaderboard on Tuesday morning after the shares received a boost via a double-upgrade from analysts at Bernstein.
The pest controller was raised to an 'outperform' rating from 'underperform' previously, with the share price target upped to 570p from 313p.
Bernstein analyst Will Kirkness has taken confidence from recent updates indicating that organic revenue growth is picking up after Rentokil struggled with the integration of its US acquisition Terminix.
The analyst expressed confidence that the group "can enjoy structural growth in line with the industry", with growth just needing to be in line with the wider industry while continuing its consolidation strategy and having various levers to support EBITA and "considerably" improve returns and cash flow.
He said his previously feared increase in investment to drive growth "should not be required as low return spend from 2024 is being reallocated into activities with better conversion, namely satellite stores and more focused marketing".
After Andy Ransom's retirement in May, Kirkness conceded that he runs the risk of "being early" with his upgrade, "but upside pressure is starting to build, and we see it as increasingly likely that investors will place a greater value on the pest business on first signs of progress".