Jefferies has upgraded Rentokil Initial PLC (LON:RTO) to ‘buy’ from ‘hold’ and increased its price target to 340p from 335p.
In a note to clients, analysts at the investment bank said that Rentokil had maintained momentum in pest control, improved its balance sheet capacity while the risk-reward profile has been boosted by the recent pull-back in the share price.
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The analysts said that company’s core pest control division remained solid and is the most important driver of the company.
They said: “We consider organic growth rates of key competitors, which reassure as of our belief that Rentokil’s pest control business is not losing market share.”
The Jefferies analysts concluded that the better financial position meant Rentokil can maintain its recent M&A activity while remaining with borrowing targets.