Bunzl offers strong value, says Shore Capital

(Sharecast News) - Shore Capital has repeated its 'buy' recommendation for Bunzl, saying the distribution giant offers "strong value and investment credentials".

The broker attended an analysts' meeting with Bunzl's finance director on Tuesday to talk about the long-term outlook.

"This provided an excellent opportunity to better understand the Board's views on key issues and business/strategic development," said analyst Robin Speakman.

"Bunzl remains reticent to give firm guidance at this juncture for next year, though we expect a firmer statement with the December full-year trading update."

However, he said that the company's fundamentals remain strong, "backed by excellent cash flow credentials and a strong/strengthening balance sheet which delivers asset allocation optionality."

The stock trades at 15.6 times earnings, falling to 15.3 times on next year's forecasts, the broker said.

"As always, further acquisitions can be expected to drive upgrades as the year progresses. Bunzl remains a quality cash compounding play, in our view."

Shore Capital has a fair value estimate of 2,805p on the stock, which was trading 0.5% lower at 2,792p by midday on Wednesday.