Rentokil Initial plc

BATS-CHIXE:RTOL Stock Report

Market Cap: UK£10.1b

Rentokil Initial Valuation

Is RTOL undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of RTOL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: RTOL (£4.03) is trading below our estimate of fair value (£4.43)

Significantly Below Fair Value: RTOL is trading below fair value, but not by a significant amount.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for RTOL?

Key metric: As RTOL is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for RTOL. This is calculated by dividing RTOL's market cap by their current earnings.
What is RTOL's PE Ratio?
PE Ratio25.8x
EarningsUK£392.00m
Market CapUK£10.11b

Price to Earnings Ratio vs Peers

How does RTOL's PE Ratio compare to its peers?

The above table shows the PE ratio for RTOL vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average14.4x
SRP Serco Group
11.4x3.7%UK£1.6b
MTO Mitie Group
11.1x11.3%UK£1.3b
RWI Renewi
17.6x36.5%UK£451.1m
WATR Water Intelligence
17.3x15.6%UK£65.7m
RTOL Rentokil Initial
25.8x15.7%UK£10.1b

Price-To-Earnings vs Peers: RTOL is expensive based on its Price-To-Earnings Ratio (25.8x) compared to the peer average (14.3x).

Price to Earnings Ratio vs Industry

How does RTOL's PE Ratio compare vs other companies in the European Commercial Services Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
No. of Companies12PE01020304050+
0 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: RTOL is expensive based on its Price-To-Earnings Ratio (25.8x) compared to the European Commercial Services industry average (14.9x).

Price to Earnings Ratio vs Fair Ratio

What is RTOL's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

RTOL PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio25.8x
Fair PE Ratio34.9x

Price-To-Earnings vs Fair Ratio: RTOL is good value based on its Price-To-Earnings Ratio (25.8x) compared to the estimated Fair Price-To-Earnings Ratio (34.9x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst RTOL forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£3.99
UK£4.60
+15.4%
15.8%UK£6.20UK£3.60n/a17
Nov ’25UK£3.91
UK£4.60
+17.6%
15.8%UK£6.20UK£3.60n/a17
Oct ’25UK£3.66
UK£4.75
+29.8%
14.4%UK£6.20UK£3.60n/a17
Sep ’25UK£4.83
UK£5.54
+14.6%
12.1%UK£6.75UK£4.54n/a17
Aug ’25UK£4.64
UK£5.54
+19.3%
12.1%UK£6.75UK£4.54n/a17
Jul ’25UK£4.64
UK£5.53
+19.1%
15.5%UK£6.75UK£3.55n/a17
Jun ’25UK£4.17
UK£5.48
+31.6%
16.8%UK£6.75UK£3.55n/a17
May ’25UK£4.01
UK£5.48
+36.6%
16.8%UK£6.75UK£3.55n/a17
Apr ’25UK£4.72
UK£5.54
+17.4%
16.6%UK£6.75UK£3.75n/a16
Mar ’25UK£4.40
UK£5.42
+23.2%
18.9%UK£7.00UK£3.50n/a16
Feb ’25UK£4.06
UK£5.52
+35.8%
19.1%UK£7.00UK£3.50n/a16
Jan ’25UK£4.43
UK£6.01
+35.5%
15.9%UK£7.50UK£4.50n/a16
Dec ’24UK£4.27
UK£6.13
+43.7%
14.5%UK£7.50UK£4.50n/a16
Nov ’24UK£4.19
UK£6.31
+50.5%
12.1%UK£7.50UK£4.50UK£3.9116
Oct ’24UK£6.10
UK£6.59
+8.1%
10.4%UK£7.50UK£4.60UK£3.6616
Sep ’24UK£5.96
UK£6.58
+10.3%
10.4%UK£7.50UK£4.60UK£4.8316
Aug ’24UK£6.26
UK£6.55
+4.7%
10.3%UK£7.50UK£4.60UK£4.6417
Jul ’24UK£6.13
UK£6.38
+4.0%
10.5%UK£7.40UK£4.60UK£4.6417
Jun ’24UK£6.36
UK£6.34
-0.3%
10.5%UK£7.40UK£4.60UK£4.1717
May ’24UK£6.30
UK£6.22
-1.2%
9.9%UK£7.00UK£4.60UK£4.0118
Apr ’24UK£5.92
UK£6.10
+2.9%
10.1%UK£7.00UK£4.60UK£4.7218
Mar ’24UK£5.10
UK£5.89
+15.5%
11.6%UK£6.70UK£4.60UK£4.4017
Feb ’24UK£4.90
UK£5.93
+20.9%
12.0%UK£6.70UK£4.60UK£4.0617
Jan ’24UK£5.11
UK£6.05
+18.5%
9.2%UK£6.65UK£4.60UK£4.4316
Dec ’23UK£5.44
UK£6.05
+11.3%
9.2%UK£6.65UK£4.60UK£4.2716
Nov ’23UK£5.22
UK£6.08
+16.6%
9.8%UK£7.10UK£4.60UK£4.1916

Analyst Forecast: Target price is less than 20% higher than the current share price.

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