Bunzl PLC (LSE:BNZL) has been given a nudge up to its investment recommendation by US bank JP Morgan to reflect "greater confidence in a positive trajectory" over the medium term.
The bank said it started warming to distributor Bunzl in March, but was worried about the unwinding of an inflation tailwind.
But recent interim results showed clearly that work that has gone on "under the hood" at the company on margins, supplemented by a clear capital allocation policy.
“The key new information for us has been the clear upside to the North American margin from higher own brand penetration within Grocery and Foodservice (40% of Group revenue, mid-single-digit % upside to Group EBITA), as over the past year Bunzl has secured manufacturing lines with suppliers.”
Overweight with a 3,980p target is the new view compared to neutral previously.
Shares rose 1.5% to 3,518p on Monday