BUNZL (+) : Priced for permanent damage; poised for upgrades

Research evidence excerpt

BUNZL (+) : Priced for permanent damage; poised for upgrades

EQUITIES

BUSINESS SERVICES

BUNZL PRICE*OUTPERFORM2,494p  TARGET PRICE 3,000pFROMNEUTRAL(UPSIDE 20%) TARGET 22%PRICE EPS 3%26e EPS 5%27e

Priced for permanent damage; poised for upgrades

The market has priced Bunzl for permanent damage, and we think it has overshot. Execution issues9 JUNE 2026

Securities Research Report in North America appear remedied – confirmed in our meetings with the CEO last week – and this

Production time: 05:35* (London time)

de-risks the earnings base just as plastics-led inflation begins flowing through Bunzl’s fast-repricing

Research Analysts & Publishing Entities

SME model. On c9% FCF yield and priced for just 1% LT annual profit growth, the shares look too

Thomas Burlton cheap. We upgrade to Outperform (from Neutral), with a £30 target price (from £24.50).BNP Paribas London Branch

(+44) 203 430 8679

thomas.burlton@uk.bnpparibas.com North American business on track: increased confidence following meetings with the CEO

Last week we met with Bunzl’s CEO, and the meetings gave us increased confidence that the

Andrew Grobler

remedial actions and operational changes implemented in N.Am are bearing fruit. The rebalancingBNP Paribas London Branch

+(44) 207 039 9451 of central-versus-local decision-making, leadership changes now bedded in, the more disciplined

andrew.grobler@uk.bnpparibas.com own-brand approach that has stopped alienating branded suppliers, and the pace of warehouse

consolidation leave us more confident that execution problems of ‘25 are now in the rear-view mirror.

Returning product price inflation is a tailwind to topline & margins: we are 4% ahead of cons

For Bunzl the velocity of pass-through inflation is crucial, and the group’s largest product exposures