Rentokil Initial plc (RTO)
Industrials · NYQ · US
Fundamentals
Valuation and ratings
Rentokil Initial plc trades at USD30.41, which is 28% above the USD21.94 our discounted cash flow model puts on the business. On that measure it screens as expensive, which is not the same as saying it will fall.
Our moat model scores it 29 out of 100, which is little in the way of a moat. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 52.2 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Rentokil Initial plc
Rentokil Initial plc, together with its subsidiaries, provides route-based services in North America, Europe, the United Kingdom, Asia, the Middle East, North Africa, Turkey, and Pacific. The company offers a range of pest control services for rodents, and flying and crawling insects, as well as other forms of wildlife management. It provides hygiene services, including the provision and maintenance of products, such as soap and hand sanitizer dispensers, hand dryers, air care and purification, cubicle and surface sanitizers, feminine hygiene units, toilet paper dispensers, and floor protection mats. In addition, the company engages in the supply and laundering of garments for commercial organizations. Further, the company provides a range of specialist cleaning services, such as graffiti removal, deep cleaning of kitchens and washrooms, trauma cleaning, and flood or fire damage cleaning, as well as specialist deep cleaning services. Rentokil Initial plc was founded in 1903 and is headquartered in Crawley, the United Kingdom.
RTO passes 2 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Smart money ownership
5 of the funds we track reported a position in their latest SEC 13F filing. Largest first:
- D. E. Shaw, D. E. Shaw & Co., Inc.$13.82M · 0.0% of book
- Arrowstreet Capital, ARROWSTREET CAPITAL, LIMITED PARTNERSHIP$1.27M · 0.0% of book
- Ken Griffin, CITADEL ADVISORS LLC$679.5K · 0.0% of book
- Cliff Asness, AQR CAPITAL MANAGEMENT LLC$400.2K · 0.0% of book
- Parnassus Investments, PARNASSUS INVESTMENTS, LLC$332.8K · 0.0% of book
A word of warning on reading these figures: a 13F reports the market value of a holding, so a fund that traded nothing at all still appears to have sold when the price fell. We found 102 companies where the standard reading gives the opposite answer. Only the share count is honest.
Common questions
Is Rentokil Initial plc (RTO) undervalued?
Against our discounted cash flow estimate of USD21.94, RTO at USD30.41 is 28% above fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
Which funds own RTO?
5 of the institutions we track reported a position in RTO in their most recent SEC 13F filing. A 13F is filed up to 45 days after quarter end, so it tells you what a fund held then, not what it holds now.
What is RTO's P/E ratio?
RTO trades at 52.2 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
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Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.