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RBC Capital downgraded Bunzl Plc. (LON:BNZL:LN) (OTC:BZLFY) from Outperform to Sector Perform on Tuesday, while reducing its price target to GBP23.50 from GBP26.00, representing a 10% decrease.
The downgrade reflects growing concerns that Bunzl’s April warning about business performance was not an isolated incident, according to RBC Capital’s research note.
The investment firm cited "seemingly Street-wide concerns" that Bunzl faces increased competition, which could put additional pressure on the company’s organic margins over the medium term.
RBC Capital indicated it sees better potential in other companies within the sector, specifically mentioning Rentokil and Teleperformance (EPA:TEPRF) as offering superior "special sit" opportunities over the medium term.
The price target reduction comes as investors continue to assess Bunzl’s competitive position and its ability to maintain margins in its distribution business amid challenging market conditions.
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