Rentokil Initial’s shares fell to a 52-week low of $23.24 on Thursday, extending a year-to-date decline of 19% as North American pest control demand softened and the company retired its 2027 margin target.
The pest control and hygiene services provider’s stock is now trading 33% below its 52-week high of $34.66, with a one-year decline of 4.86%. First-half revenue increased 4.5% to $3.589 billion, below the $3.661 billion forecast, reflecting a 4.2% rise in North American revenue to $2.197 billion and a 5.0% gain internationally to $1.392 billion.
Operating profit for the period grew 6.6%, while free cash flow rose 12.8% with a cash conversion rate of 96%. Rentokil also retired its North America 20% margin target for 2027, signaling a strategic shift amid weaker residential lead flow and a slowdown in its core U.S. pest control business.
Analysts at BNP Paribas Exane downgraded Rentokil’s stock to Neutral from Outperform, citing concerns over restructuring efforts and the U.S. market slowdown. Despite the recent weakness, InvestingPro’s analysis highlights the stock’s PEG ratio of 0.84 as an indicator of potential undervaluation relative to growth prospects.
The company’s international pest control segment continues to show organic growth, contrasting with challenges in its North American operations.
Shares of Rentokil Initial PLC ADR were down 2.1% at $23.30 in late-morning trading.
