Rentokil Initial plc (RTO): A Bull Case Theory 

We came across a bullish thesis on Rentokil Initial plc on The Dutch Investor’s Substack. In this article, we will summarize the bulls’ thesis on RTO. Rentokil Initial plc’s share was trading at $26.57 as of October 6th. RTO’s trailing and forward P/E were 41.10 and 18.90 respectively according to Yahoo Finance.

Rentokil Initial is the world’s largest pest services company, benefiting from a highly attractive business model that combines recurring revenue, high customer retention, and minimal capital requirements. The sector is resilient, with demand largely independent of economic cycles, and structural growth driven by rising wealth and increased prioritization of pest control, supporting above-GDP expansion for decades. Rentokil’s scale gives it a meaningful advantage over smaller operators, allowing larger branches generating over $8 million in revenue to achieve operating margins more than 10% higher than smaller peers.

The company has pursued growth through an aggressive acquisition strategy, completing over 200 acquisitions in the past decade, including 41 in 2019 alone across 23 countries, consolidating fragmented local markets into a unified platform. In a strategic shift, Rentokil acquired Terminix in 2022 for approximately $6 billion, becoming the largest player in the U.S. and, together with Rollins, commanding over 50% of the market. While integration challenges in North America have slowed growth and led to a roughly 40% drop in the stock price since the acquisition announcement, these short-term hurdles obscure the company’s long-term strength.

Rentokil remains a high-quality business with durable fundamentals, a proven roll-up model, and leadership positions in a structurally growing market. Its scale, recurring revenue model, and resilient cash flows suggest that the company is well-positioned to generate sustainable returns, and the current market reaction likely underestimates its long-term value, presenting a compelling opportunity for patient investors.

Previously we covered a bullish thesis on Rentokil Initial plc (RTO) by Mike MaxDividends Team in May 2025, which highlighted the company’s global leadership, recurring revenues, and integration challenges with Terminix. The company’s stock price has appreciated approximately by 11.21% since our coverage. The thesis still stands as Rentokil’s resilient international operations and long-term growth potential remain intact. The Dutch Investor shares a similar bullish view but emphasizes Rentokil’s scale and acquisition-driven expansion.

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Disclosure: None.