The stock market’s flashing warning signs that are hard to ignore right now. US and UK valuations are near record highs, geopolitical tensions are driving fresh inflationary pressure, and some institutional analysts are beginning to raise serious questions about whether current price levels can hold.
Should investors be worried?
Is a crash coming?
Right now, the doomsday predictions of some bearish investors are easy to understand. Markets are expensive because investors are pricing in a wave of AI-powered earnings growth that has not yet materialised.
If that earnings boom disappoints, or simply arrives late, valuations could unravel quickly. This is particularly true in the US stock market, where index funds are heavily invested in the most exposed companies.
Inflation sparked by the Middle East conflict is adding another layer of uncertainty. With energy costs creeping higher, margins across energy-hungry sectors, including technology, are starting to feel the pinch. And when paired with supply chain disruptions, central banks have largely had to hit ‘pause’ on their interest rate-cutting programmes.
That’s obviously concerning. Yet it’s important to remember that very few doomsday predictions ever actually come true, including those from professional analysts.
Looking at the current landscape, while it’s true there are mounting pressures, productivity gains from AI is starting to emerge. In fact, the latest round of trading updates have broadly been pretty strong, triggering yet another rally in UK and US tech stocks. And if the momentum continues, 2026 could prove to be yet another year of tremendous returns.
That’s why, personally, I’m not panic selling. Instead, I’m busy hunting for new opportunities.
Where to look if you’re nervous
Even if the idea of investing in technology right now sounds unattractive, there are still countless non-AI opportunities for investors to explore.
Rentokil Initial‘s (LSE:RTO) one stock that’s recently caught my eye on this front.
As a quick introduction, Rentokil’s one of the world’s biggest pest control and hygiene services businesses, operating across North America, Europe, and beyond.
It isn’t glamorous. But pest control’s a non-discretionary service that’s needed regardless of economic conditions.
Promising potential
The firm’s latest (first quarter) update was pretty encouraging. Total revenue climbed 4.3% on a constant currency basis, with 3.4% pure organic growth. North America, its largest market, grew at a 4.7% rate, and management’s subsequently reiterated its full-year guidance.
Obviously, these growth figures are hardly groundbreaking. But slow and steady is how Rentokil shares have already delivered a 23% gain over the last 12 months. And looking at the latest share price forecasts from Panmure Liberum, there could be another 30% gain on the table with its share price target of 563p thanks to the continued expansion of its hygiene and washroom services division in addition to pest control.
Of course, there are some notable risks. The company faces intensifying competition from rivals such as Rollins and Anticimex, both of which are aggressively expanding their own footprints and could make it harder for Rentokil to sustain its pricing power And the company will have to overcome these challenges for Panmure’s forecast to play out – not a guaranteed outcome.
Nevertheless, for investors looking for a more crash-resistant value stock with solid long-term potential and an undemanding valuation, Rentokil might be worth a closer look.
Should you invest £5,000 in Rentokil Initial Plc right now?
When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.
And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Rentokil Initial Plc made the list?
Zaven Boyrazian does not hold any positions in the companies mentioned.
