Group 1 - European stock markets rose as investors sought signals amid a flurry of corporate earnings reports [1] - The Stoxx Europe 600 index increased by 0.4%, with the energy sector outperforming due to a 5.7% surge in Brent crude oil prices following U.S. sanctions on Russian oil companies [1] - Shell's stock price rose by 2.9% as a result of the increased oil prices [1] Group 2 - Notable stocks such as Volvo Cars, Kering Group, Rentokil Initial Plc, Metso Oyj, and Nokia Oyj performed well on Thursday, despite being heavily shorted earlier this year [1] - Investors adjusted their underweight positions following the release of corporate earnings, similar to trends observed in the U.S. market over the past few months [1] - Nokia's stock price soared to a three-year high, driven by demand for artificial intelligence and cloud services [1] - Volvo Cars' stock surged by 38% due to profits exceeding expectations [1]

Investment Rating - The investment rating for Rentokil Initial Plc is Neutral [4][7]. Core Views - The sale of the French Workwear business for approximately €410 million ($465 million) is aligned with the company's strategy to streamline operations towards lower capital expenditure pest and hygiene businesses [3][4]. - The transaction is expected to improve the group's capital expenditure to sales ratio and cash flow, with free cash flow conversion benefiting by approximately 100 basis points [3][4]. - The Workwear business generated revenues of $324 million and operational EBITA of $57 million in FY24, indicating a margin of approximately 17.7% [2][4]. Financial Metrics - The transaction values the Workwear business at approximately 1.4x EV/Sales and 8x EV/EBITA based on 2024 estimates, and about 3x EV/EBITDA assuming capital expenditures equal depreciation and amortization [2][4]. - The expected net cash proceeds from the sale are approximately €370 million ($420 million) [1][2]. - The company's 12-month price target is set at 425p, with an upside potential of 20% from the current price of 354.2p [7]. Future Projections - Revenue forecasts for Rentokil Initial Plc are projected to grow from $6.94 billion in 2024 to $7.87 billion by 2027 [7]. - EBITA is expected to increase from $1.065 billion in 2024 to $1.277 billion in 2027 [7]. - The company anticipates a gradual improvement in earnings per share (EPS), from $0.27 in 2024 to $0.32 in 2027 [7].