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Investing.com - Bernstein SocGen Group has reiterated an Outperform rating on Bunzl Plc. (LON:BNZL) with a price target of GBP29.00, citing reassuring top-line performance and margins. The $10.5 billion market cap company currently trades slightly below its InvestingPro Fair Value, with an overall financial health score of GOOD.
The research firm noted that Bunzl’s pricing improved in the third quarter while volumes were only slightly negative due to tough comparisons. Bernstein estimates that price increased by approximately 0.5% in Q3, while volumes declined by a minimal 0.1%. This performance contributes to the company’s modest revenue growth of 1.92% over the last twelve months, with a P/E ratio of 16.7x.
The full impact of second-quarter tariff-related price hikes in Bunzl’s North American safety business, which represents approximately 5% of group revenues, materialized during the third quarter. Looking ahead to the fourth quarter, Bernstein indicates the comparison base gets another 2 percentage points harder, primarily affecting volumes.
Bernstein maintained its underlying estimates for Bunzl but made adjustments for foreign exchange impacts, reducing EBITA estimates by 1%. The firm also reduced its buyback projection for fiscal years 2026 and 2027 to £200 million from a previous estimate of £700 million.
Despite these adjustments, Bernstein’s earnings per share estimates remain 5% and 9% ahead of consensus for fiscal years 2026 and 2027, respectively, primarily due to margin expectations and because consensus assumes no buybacks after fiscal year 2025. InvestingPro data reveals Bunzl maintains a perfect Piotroski Score of 9, indicating strong financial performance. Subscribers can access 8 additional ProTips and comprehensive financial metrics for deeper analysis.
In other recent news, Goldman Sachs has upgraded Bunzl Plc.’s stock rating from Sell to Neutral. This change comes as the investment firm sees a more balanced risk/reward profile for the company. The adjustment follows a significant decline in Bunzl’s share price earlier this year, which was around 30%, after the company issued a profit warning that lowered expectations for growth and margins in 2025. Goldman Sachs also raised its price target for Bunzl to GBP25.10 from GBP23.75. The firm noted that Bunzl’s first-half results were in line with expectations and highlighted the resumption of the company’s share buyback program. These factors are believed to have mitigated near-term risks for Bunzl. Investors may find this upgrade noteworthy as it reflects a shift in the perceived stability of the company’s financial outlook.
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