UBS backs Rentokil after selloff, seeing 35% upside Proactive uses images sourced from ShutterstockUBS has reiterated its 'buy' rating on Rentokil Initial PLC (LSE:RTO) following a meeting with the pest control group's new chief executive, arguing the reaction to second-quarter results has created a sharply positive risk-reward skew. The bank keeps its 480p price target, implying 35% upside from 370p, against an upside case of 640p and a downside case of 280p. Rentokil dropped its target of a North American margin above 20% by 2027 last week, which UBS notes was never in forecasts but removed a floor under profitability. Higher North American spending can be funded from savings elsewhere, leaving the shape of group margins unchanged. The shares trade on about 14 times forward enterprise value to earnings before interest, tax and amortisation, against a long-run average of 18 times, which UBS calculates implies no premium at all for the North American pest business.