Rentokil Initial looks like a possible overreaction play, pulling back from over 600p down to around 380p to 400p in London and $20 to $24 on its US listing, where it trades at roughly 13x to 15x forward earnings—well below its historical mid-20s multiple and a massive discount to main peer Rollins at over 30x—despite pulling in 6.9 billion USD in annual revenue with 615 million USD in free cash flow.
The sell-off was mostly driven by integration hiccups and branch friction from its massive 6.7 billion USD Terminix acquisition in North America, alongside a temporary slowdown in US organic growth and one-off termite provisions, rather than a broken business model.
It won't stay down here because pest control is an essential, recurring route-based business where scale and route density drive high long-term margins, and those Terminix cost synergies and branch overhauls are already re-accelerating US organic growth.
Plus, you have direct insider conviction backing up the turnaround, with newly appointed CEO Mike Duffy, Chair Thérèse Esperdy, and multiple board members executing a coordinated cluster of open-market buys near the recent lows around $23 to $24 per ADS, confirming management sees a deep valuation disconnect.