Deutsche Bank drops Bunzl from top picks after share price recovery Proactive uses images sourced from Shutterstock
Deutsche Bank has downgraded Bunzl PLC (LSE:BNZL) to ‘hold ‘from ‘buy’, arguing that the distribution group’s share price has caught up with an operational recovery the broker had been calling since the start of the year.
Analyst David Brockton nudged his target price up to 3,000p from 2,950p.
Bunzl, the FTSE 100 company that supplies non-food consumables such as packaging, gloves and cleaning products to businesses, had been one of the broker’s top picks in the business services sector for 2026.
Brockton said management’s tone had noticeably improved over the past 18 months.
The group endured weak volumes, deflation and what the analyst described as self-inflicted execution problems in its North American distribution arm during 2025, an operation accounting for roughly 30% of revenue.
That division has since restored service levels and product availability.
The year to date has brought a return to volume growth, helped by easier comparative figures and improved contract wins, alongside a return to inflation as the company passes on geopolitically driven increases in product costs.
Half-year results on 1 September should confirm better operational delivery and a more supportive pricing backdrop, Brockton said.
He sees potential upside in the second half from more persistent product cost inflation and a revival in acquisitions, historically a core part of Bunzl’s growth model.
The problem is valuation. The shares have largely recovered the ground lost after a profit warning in 2025 and now trade close to their long-run average multiples.
Brockton concluded that the improvements are more fairly reflected in the price at current levels.
The shares fell 1% to 2,776p.