Citi has upgraded Bunzl PLC (LSE:BNZL) to a 'buy' rating, maintaining its target price of £37.00 and forecasting an estimated total return (ETR) of approximately 15%.
The decision reflects a reassessment of Bunzl’s defensive appeal, particularly as rising bond yields heighten market uncertainty.
The move comes after Citi downgraded the stock to 'neutral' in December, citing concerns over deflationary pressures impacting Bunzl’s organic growth and profit margins.
Since then, Bunzl has underperformed the market by 8%, prompting Citi to highlight the company’s value as a hedged investment in the current economic climate.
Bunzl, a leading distributor of essential goods such as cleaning supplies, packaging, and personal protective equipment, is valued for its diverse business model and ability to deliver steady cash flows across industries and geographies.
Citi noted that Bunzl’s broad customer base and operational stability make it particularly attractive during periods of economic volatility, when more cyclical stocks tend to struggle.
In afternoon trading the stock was up 1% at 3,312p.