Bunzl PLC (LSE:BNZL) shares have slid by 13% since a first-half trading update on 15 June.
Shore Capital says that is harsh given a robust underlying performance, a hint of margin improvement and more earnings-boosting acquisitions.
A full set of interim numbers are due Tuesday (29 August) and the broker is forecasting revenues to rise 5% to £5.92 billion, underlying profits by the same percentage to £431 million and pretax profits by 2% to £387 million with higher interest the difference in profits numbers.
Inflation continues to drive "good underlying" revenue growth in continental Europe and "strong growth" in the UK & Ireland, Bunzl said in June.
The company has also announced 10 acquisition transactions in the year to date, bringing in £200 million of annual revenues.
ShoreCap likes the story and has a ‘buy’ rating.
“Fundamentals remain strong backed by excellent cash flow credentials and a strong balance sheet with growing firepower for shareholder value creation.
“As always, further acquisitions can be expected to drive upgrades as the year progresses. Bunzl remains a quality cash compounding play, in our view,” the broker said.