- Rentokil Initial target price increased
- Downgrade for Dunelm
- Persimmon downgraded to ‘Neutral’
Rentokil Initial target price increased
Barclays has increased it’s target price for Rentokil Initial LON:RTO to 700p from 650p and reiterated its ‘Overweight’ rating. The broker has identified US listed Rollins NYSE:ROL as a comparator following Rentokil’s acquisition of Terminix, noting that the “business profiles of both North American Pest businesses are similar and we argue there is scope for a further re-rating at Rentokil if targets are delivered according to plan.”
Rentokil Initial shares were trading at 604.40p, up 16% this year and up 25% over the last 12 month period.
Downgrade for Dunelm
RBC Capital has downgraded Dunelm LON:DNLM to ‘Underperform’ from ‘Sector Perform’ and reduced its target price to 1,000p from 1300p this week. The broker noted that the FTSE 250 retailer was a well managed business “with a strong position in the UK homewares market…However, with cost-of-living pressures persisting, unfavourable movements in the UK housing market and only a moderate store expansion story, we think that growth will be more difficult to come by now.”
Dunelm shares were trading at 1077.13p, up 8% for the year to date and up 36% over the last 12 months.
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Persimmon downgraded to ‘Neutral’
JP Morgan has raised concerns about a potential slowdown in sales for UK housebuilders, noting that uncertainty in interest rates could lead to a softening in sales rates, jeopardising volume estimates for all UK homebuilders in 2024. The broker also highlighted the possibility of affordability-driven average selling price declines. As a result, the brokerage downgraded its rating on Persimmon LON:PSN to “Neutral” from “Overweight” and reduced the target price from 1,600p to 1,090p. The broker expressed scepticism about the company’s potential for a recovery in the near term.
Additionally, JP Morgan lowered its target price on all eight constituents in the sector index.
Persimmon shares were trading at 1020.50p at the time of writing, down 20% for the year to date and -44% over the last 12 months.
