RBC Adjusts Model for Bunzl Post-H1 Results; Sector Perform Rating Kept

06:38 AM EDT, 09/02/2026 (MT Newswires) -- RBC Capital Markets revised its model for Bunzl (BNZL.L), tweaking its earnings forecasts to reflect the British distribution and outsourcing group's first-half performance. "Our EPS estimates rise by 3.5% for FY26 and by 2.4% for FY27 reflecting the H126 adjusted earnings beat and a cut in our assumed non-controlling interest charge which has consistently tracked below our expectations post the Nisbet acquisition. FY26 guidance likely errs on the side of caution, as we do not think that stock profits (the key driver of the H1 beat) are likely to symmetrically reverse in H2 (the 'elevator up; stairs down' principle around pricing), but H127 has certainly been teed up with a tough comp. EPS momentum in the short term will also have a degree of support from buybacks and bolt-on M&A which the CEO still believes will pick up over the next 6 months," according to a Tuesday note. For full-year 2026, Bunzl upgraded its outlook and now expects a "modest" adjusted operating profit growth at constant exchange rates. It also continues to forecast revenue growth at constant exchange rates, bolstered by a "modest" growth in underlying revenue. Meanwhile, the research firm maintained its fundamental view on Bunzl, affirming its sector perform rating and price target of 26 pounds on the stock. "Since the Iran conflict began, BNZL has screened out as a consensus beneficiary of the resurgence of inflation, especially around plastic polymer feedstocks, though pricing seems to have rolled over in the short term and is likely to remain somewhat volatile. We are also [cognizant] of both the potential for weaker consumer demand impacting volumes and incremental hesitancy by vendors in negotiations with BNZL under its foundational M&A growth strategy, though BNZL has toggled its capital allocation to buybacks in the short term to maintain an efficient balance sheet. We currently prefer other defensive growth names in the wider sector with stronger structural [organic sales growth] prospects," analysts wrote.