Bunzl share price: Analysts say longer-term attractions remain

The Share Centre argues that longer-term attractions for Bunzl (LON:BNZL) remain, Citywire reports. The comments mark a boost for the company, which provides products ranging from food packaging to safety equipment, following its trading update yesterday.

The reveal that revenue had slowed down in the first three months of the year sent the Bunzl share price tumbling in London trading yesterday, with the shares giving up 9.29 percent to 2,314.00p. This morning, the shares have fallen 0.61 percent to 2,300.00p as of 08:13 BST.

The Share Centre weighs in on Bunzl

Citywire quoted The Share Centre analyst Graham Spooner as commenting that Bunzl was still a ‘long-term ‘buy’’ despite reporting a slowdown in US sales, which worried investors as around 58 percent of revenue is derived from the region. The analyst further noted that the company had seen revenues slow across the board due to macroeconomic concerns and market conditions.

“With the shares pre-update close to an all-time high, any sign of turbulence was likely to hit the shares hard,” Spooner commented, adding that while investors might “have to put on the company’s safety hats for a period of time,” Bunzl’s longer-term attractions remained.

Other analysts on blue-chip company

City A.M. meanwhile quoted Russ Mould, investment director at AJ Bell, said Bunzl’s update was proof markets were right to fear a global economic slowdown.

“Analysts should have already factored in slowing GDP growth to their earnings forecasts because of plentiful signs of economic weakness around the world,” he pointed out. “Yet life is much worse than expected for Bunzl judging by its sharp share price decline on the news.”

Shore Capital reaffirmed the London-listed group as a ‘buy’ yesterday, without specifying a target on the Bunzl share price. According to MarketBeat, the blue-chip group currently has a consensus ‘hold’ rating and an average valuation of 2,401.17p.