Rentokil Earnings: Shares Still Attractive Despite Muted Improvement in North American Pest Control

Wide-moat Rentokil Initial’s second-quarter performance offered glimpses of modest improvement in its beleaguered North American pest control operations. The North America pest control business reported a 50-basis-point sequential improvement in the organic sales growth rate to 1.5% in the second quarter, as previously announced incremental sales and marketing investments show early signs that they are restoring top-line growth. Still, the second-quarter performance in North America pales in comparison with peer wide-moat Rollins that posted 7.7% organic top-line growth in the second quarter, highlighting the ongoing challenges faced by Rentokil as it integrates the Terminix business into its broader North American operations.