Broker tips: Rentokil Initial, Currys

(Sharecast News) - Rentokil Initial shares sparked on Thursday after Bank of America upgraded the pest control firm to 'buy' from 'neutral' and lifted the price target to 510p from 425p, citing recent share price underperformance. Bank of America said the underperformance of the shares this year leaves the valuation 10% below history, leading it to add Rentokil to its 'Europe 1 list' of top ideas, adding that it believes the company still has an "untapped" opportunity in residential.

BofA also said that with more visibility on Rentokil's Terminix integration, there was scope for a re-rating in 2026.

Berenberg has raised its target price for Currys after a stronger-than-expected interim report from the electrical retailer on Thursday, saying the recent pullback in the stock offers a good buying opportunity for investors.

"Currys continues to set itself apart from wider retail peers as it delivers yet more upgrades and enters 2026 with encouraging momentum," Berenberg said. "The c15% share price fall since late October offers a good chance to buy into shares that remain far too cheap, in our view."

Along with slightly lower interest guidance, Berenberg raised its full-year adjusted profit before tax forecast by 5% from £170m to £178m, and upped its target for the stock from 200p to 210p.

The German bank, which has a 'buy' rating on the stock, also highlighted Currys ongoing focus on margin and cash drop-through, which resulted in a 68% increase in first-half free cash flow to £84m, supporting a £16m dividend payout and completion of £30m of the planned £50m share buyback.