Rentokil Initial PLC (LSE:RTO) could be poised for a recovery after years of disruption linked to its acquisition of US business Terminix, according to Panmure Liberum.
The broker initiated coverage with a 'buy' rating and a 563p price target, saying the FTSE 100 group is the world's largest pest control company, with around 20% global market share and about 25% of the North American market, giving it scale advantages in an industry benefiting from long-term growth drivers including urbanisation, climate change and stricter hygiene standards.
However, the company has underperformed rivals in recent years, blaming much of that on the integration of Terminix since it was acquired in 2022.
"We see Terminix as a strategically positive deal, poorly executed and at the wrong price," analysts Joe Brent and Joe Walker wrote.
Panmure said Rentokil's North American business generated organic growth of just 2.3% in 2025, compared with 6.9% at rival Rollins, while margins also lagged peers.
The broker expects new chief executive Mike Duffy to improve operational performance, accelerate growth and close the profitability gap.
It identified five potential catalysts, including a strategic update at July's interim results, sustained improvement in North American growth, progress towards a 20% North American margin by 2027 and stronger cash generation.
Panmure said Rentokil's shares trade on 21.2 times expected 2026 earnings, a discount of about 45% to US rival Rollins, and argued improved execution could help narrow that gap over time.