Broker tips: Rentokil Initial, M&S, Quilter
By Iain Gilbert
Date: Tuesday 07 Oct 2025
(Sharecast News) - Bernstein doubled upgraded Rentokil Initial on Tuesday to 'outperform' from 'underperform' and hiked the price target to 570p from 313p, saying it sees signs of inflecting organic revenue growth.
The bank also said it believes that Rentokil can enjoy structural growth in line with the industry, combined with ongoing consolidation.
"Given cost and free cash flow levers available to the group under the stewardship of Paul as CFO we consider EBITA levels well underpinned," Bernstein said. "This, combined with FCF enhancing initiatives, could considerably enhance the return on invested capital profile of the group."
Bernstein added that with a new CEO yet to be announced, it runs the risk of being early but upside pressure is starting to build, and it sees it as increasingly likely that investors will place a greater value on the Pest business on first signs of progress.
JPMorgan Cazenove reiterated its 'overweight' rating on Marks & Spencer on Tuesday and placed the shares on 'positive catalyst watch' ahead of first-half results and the Capital Markets Day next month.
It noted that the retailer has not updated the market since its full-year 2025 results in May when investors were understandably focused on the implications of the April cyber attack.
"With the vast majority of the group's systems now relaunched, and the online business re-opened, we think M&S is now largely back to BAU," it said. "Worldpanel and Nielsen Grocery data suggests that engagement has been maintained in Food (with M&S shopper numbers + circa12% yoy). In the FH&B business web & app traffic trends have shown an improvement back into positive territory."
JPM said it thinks the balance of risk has now firmly shifted to the upside, assuming that M&S can reassure on consumer re-engagement in FH&B into peak.
The bank expects investor focus to start moving back to the fundamental turnaround story, where it sees continued opportunity for share gains in both divisions, along with efficiencies to support growth investments and margin.
Quilter shot to the top of the FTSE 250 on Tuesday as RBC Capital Markets suggested it could be a potential takeover target for Lloyds.
RBC noted that UK banks, and particularly Lloyds, are underpenetrated in wealth management, missing out on relatively high structural growth and returns. "In light of narrowing valuation differentials, we think that the imminent introduction of Target Support could act as a catalyst for Lloyds to acquire a wealth manager, and we see Quilter as a particularly attractive proposition," it said.
RBC pointed out that Quilter has a digestible market cap, a national distribution footprint and an adviser base that can cater to mass affluent clients, which is where it sees the greatest cross-selling opportunity. It said the group structure has simplified considerably since listing, and with re-platforming, slow organic growth, ongoing advice issues all seemingly behind the company, RBC believes Quilter is now a fundamentally more appealing asset than at any time since listing, yet is trading at close to the five-year average in price-to-earnings terms.
RBC noted that unconfirmed press reports suggest Lloyds is considering buying the approximately 50% of the joint venture that it does not own. It said the ending of the SPW JV with Schroders could represent Lloyds "clearing the decks before bolstering their affluent wealth offering through inorganic activity in our view".
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN