In a report released today, Jacob Armstrong from Stifel Nicolaus upgraded Bunzl plc (BNZL – Research Report) to a Buy, with a price target of p3,500.00.
Jacob Armstrong has given his Buy rating due to a combination of factors including Bunzl plc’s improving trading trends and strong balance sheet. The company is currently trading at a valuation discount of approximately 15% compared to its historical averages, which Armstrong sees as an attractive entry point. Additionally, Bunzl’s high level of domestic sourcing is expected to mitigate the impact of potential tariffs, further enhancing its resilience.
Armstrong also notes that Bunzl has significant headroom for mergers and acquisitions, with a forecasted leverage of around 1.6x by the end of FY25, providing ample room for capital allocation strategies. The company’s robust financial performance, including a 3.1% increase in revenues and a 7.2% rise in adjusted operating profits, supports the positive outlook. Furthermore, Bunzl’s ability to maintain record-level profit margins and its strategic initiatives in digital capabilities and operational efficiency contribute to the Buy rating.
In another report released on March 31, Barclays also upgraded the stock to a Buy with a £36.50 price target.