Rentokil Initial PLC's stock plummeted 9.61% in Thursday's pre-market trading session, following concerns raised by analysts at J.P. Morgan that the pest-control and hygiene services provider's 2027 margin guidance might be too ambitious.
In a research note, the analysts stated that while investors may be relieved that Rentokil has confirmed its 2025 consensus expectations, the company's goal of achieving a 20% increase in margins for its North American operations "might be difficult to reach, unless growth surprises materially on the upside."
The analysts acknowledged that Rentokil should eventually be able to achieve its margins guidance over time. However, they expressed doubts about the timeline for reaching the North America margin target based on current projections.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.