Bunzl (BZLFY) AI Stock Analysis

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Bunzl

(OTC:BZLFY)

68Neutral

Bunzl demonstrates a stable financial foundation with strong cash flow and profitability metrics, though revenue growth remains a concern. Technical analysis indicates bearish trends, but valuation metrics offer a balanced view in terms of growth and income. The recent earnings call highlights strategic successes and operational challenges, presenting a mixed but cautiously optimistic outlook for the stock.

Bunzl (BZLFY) vs. S&P 500 (SPY)

Market Cap

$10.84B

Dividend Yield2.52%

Average Volume (3M)2.44K

Price to Earnings (P/E)17.4

Beta (1Y)0.58

Revenue Growth2.64%

EPS Growth-1.79%

CountryUS

Employees26,978

SectorIndustrials

Sector Strength89

IndustryFood Distribution

Share Statistics

EPS (TTM)1.33

Shares Outstanding655,281,100

10 Day Avg. Volume0

30 Day Avg. Volume2,435

Financial Highlights & Ratios

PEG Ratio-1.36

Price to Book (P/B)1.80

Price to Sales (P/S)0.00

P/FCF Ratio11.53

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusModerate Buy

Number of Analyst Covering1

Bunzl Business Overview & Revenue Model

Company DescriptionBunzl plc is a multinational distribution and outsourcing company headquartered in London, United Kingdom. The company specializes in providing a wide range of non-food consumable products across various sectors including grocery, foodservice, cleaning and hygiene, safety, and healthcare. Bunzl's core offerings include packaging, cleaning and hygiene supplies, personal protection equipment, and disposable tableware, among others. The company operates in over 30 countries, leveraging its extensive distribution network to serve a diverse customer base.

How the Company Makes MoneyBunzl makes money primarily through the distribution of a broad range of non-food consumable products. The company generates revenue by purchasing products in bulk from manufacturers and distributing them to businesses across various sectors such as retail, foodservice, healthcare, and cleaning. Key revenue streams include sales of packaging materials, cleaning and hygiene products, personal protection equipment, and catering supplies. Bunzl's business model benefits from long-term contracts and relationships with suppliers and customers, allowing it to maintain steady cash flow and profitability. Additionally, Bunzl's geographic and sectoral diversification helps mitigate risks and capitalize on opportunities in different markets, contributing to its overall earnings.

Bunzl Financial Statement Overview

Summary

Bunzl's financial performance is strong, with consistent profitability, stable balance sheet metrics, and robust cash flow generation. The company maintains solid profit margins, effective cash management, and a balanced leverage, indicating long-term stability and growth.

Income Statement

Very Positive

Bunzl's income statement shows strong performance with a healthy gross profit margin and improving net profit margin. The company experienced a slight decline in revenue in the latest year, but EBIT and EBITDA margins indicate robust operational efficiency. Revenue growth over the years has been moderate, suggesting stability in the core business operations.

Balance Sheet

Positive

The balance sheet reflects a stable financial position with a solid equity ratio, indicating strong asset backing by equity. The debt-to-equity ratio is moderate, suggesting a balanced approach to leverage. Return on equity has improved, showcasing effective utilization of shareholder funds. Overall, the balance sheet suggests financial stability with manageable leverage levels.

Cash Flow

Very Positive

Cash flow analysis reveals a positive trend with increasing free cash flow, showcasing strong cash generation capabilities. The operating cash flow to net income ratio is healthy, indicating efficient cash conversion. The free cash flow growth rate is positive, highlighting effective cash management. Overall, Bunzl demonstrates strong cash flow stability and growth.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
16.60B	11.80B	12.04B	10.29B	10.11B	9.33B
	Gross Profit
8.10B	3.19B	3.02B	2.52B	2.58B	2.29B
	EBIT
986.75M	789.10M	701.60M	623.30M	618.50M	528.40M
	EBITDA
1.35B	1.18B	1.04B	910.20M	899.00M	807.20M
	Net Income Common Stockholders
680.10M	526.20M	474.40M	442.80M	430.00M	349.20M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
477.70M	1.43B	1.50B	776.90M	944.30M	610.50M
	Total Assets
5.56B	8.75B	8.67B	7.11B	6.83B	5.92B
	Total Debt
1.86B	3.09B	3.13B	2.59B	2.71B	2.35B
	Net Debt
1.39B	1.66B	1.63B	1.81B	1.76B	1.74B
	Total Liabilities
3.86B	5.78B	5.95B	4.91B	4.91B	4.18B
	Stockholders Equity
1.69B	2.97B	2.72B	2.20B	1.92B	1.74B
Cash Flow		Free Cash Flow
1.04B	845.70M	904.90M	700.40M	757.10M	632.40M
	Operating Cash Flow
1.09B	904.00M	951.60M	733.10M	790.20M	669.30M
	Investing Cash Flow
-680.25M	-339.50M	-223.20M	-458.00M	-380.00M	-162.60M
	Financing Cash Flow
-644.15M	-666.90M	-331.00M	-458.70M	-122.20M	-492.20M

Bunzl Technical Analysis

Technical Analysis Sentiment

Neutral

Last Price16.69

Price Trends

50DMA

17.92

Negative

100DMA

19.45

Negative

200DMA

20.90

Negative

Market Momentum

MACD

-0.43

Negative

RSI

47.64

Neutral

STOCH

94.30

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BZLFY, the sentiment is Neutral. The current price of 16.69 is above the 20-day moving average (MA) of 15.83, below the 50-day MA of 17.92, and below the 200-day MA of 20.90, indicating a neutral trend. The MACD of -0.43 indicates Negative momentum. The RSI at 47.64 is Neutral, neither overbought nor oversold. The STOCH value of 94.30 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for BZLFY.

Bunzl Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PFGC	79 Outperform	$13.75B	36.67	9.05%	―	6.20%	-10.58%
USFD	77 Outperform	$17.33B	34.83	11.16%	―	6.32%	5.69%
CHEF	74 Outperform	$2.65B	43.44	12.90%	―	7.85%	79.89%
SYY	74 Outperform	$35.12B	18.71	94.91%	2.82%	3.55%	-5.79%
BZLFY	68 Neutral	$10.84B	17.40	17.62%	2.52%	2.64%	-1.79%
Sector *	64 Neutral	$4.43B	12.01	5.15%	249.50%	3.98%	-11.60%
UNFI	63 Neutral	$1.88B	―	-4.94%	―	4.73%	29.70%

* Industrials Sector Average

Performance Comparison

BZLFY

Bunzl

16.71

-2.51

-13.06%

SYY

Sysco

72.44

-1.40

-1.90%

CHEF

The Chefs' Warehouse

65.11

26.19

67.29%

UNFI

United Natural Foods

31.13

19.92

177.70%

PFGC

Performance Food Group

88.09

14.09

19.04%

USFD

Us Foods Holding Corp.

76.63

21.47

38.92%

Bunzl Earnings Call Summary

Earnings Call Date:Mar 03, 2025

(Q4-2024)

% Change Since: -21.27%|

Next Earnings Date:Sep 02, 2025

Earnings Call Sentiment Neutral

The earnings call presents a mixed outlook. While Bunzl achieved strong operating profit growth, record acquisition activity, and increased own brand penetration, these positives are countered by challenges such as deflation impacting revenue growth, currency translation issues, and increased leverage. The sentiment reflects both the strategic successes and the operational challenges faced by the company.

Q4-2024 Updates

Positive Updates

Strong Operating Profit Growth

Bunzl achieved strong adjusted operating profit growth of 7.2% at constant exchange rates, primarily driven by operating margin expansion from 8% to 8.3%.

Record Acquisition Spend

The company committed a record GBP 883 million to acquisitions this year with 13 announced acquisitions across 5 sectors and 9 countries.

Increased Own Brand Penetration

Own brand penetration increased to 28% from 25% last year, primarily driven by actions to develop the own brand offering in North America.

High Return on Invested Capital

Return on invested capital was 14.8%, well ahead of the group's WACC, showcasing strong capital efficiency.

Cash Conversion and Dividend Growth

Consistent cash generation with GBP 634 million of free cash flow and a 93% cash conversion rate. Total dividend per share increased by 8.2%.

Negative Updates

Revenue Growth Impacted by Deflation

Revenue at constant exchange rates increased by only 3.1%, with net acquisitions contributing 5.1% to growth but offset by a 2.4% decline in underlying revenue due to deflation and volume reductions in North America.

Currency Translation Impact

Results were negatively impacted by currency translation of between 3% and 4% across the income statement.

European Market Challenges

Continental Europe experienced moderate revenue growth impacted by deflation and high operating cost inflation, affecting adjusted operating profit and margin.

Debt and Leverage Increase

Leverage increased with adjusted net debt to EBITDA rising to 1.8x, driven by record acquisition spend and buybacks.

Company Guidance

The call highlighted Bunzl's strong financial performance and strategic initiatives for 2024, emphasizing key metrics such as a 7.2% increase in adjusted operating profit at constant exchange rates, driven by margin expansion from 8% to 8.3%. Revenue rose by 3.1%, supported by a 5.1% contribution from net acquisitions, while underlying revenue declined by 2.4% due to deflation and volume reductions, particularly in North America. The company maintained a robust return on invested capital at 14.8%, with free cash flow generation of GBP 634 million and a cash conversion rate of 93%. The total dividend per share increased by 8.2%, and two share buyback programs were announced, totaling GBP 450 million. Bunzl's strategic focus included a record GBP 883 million in acquisitions across five sectors and nine countries, with an increase in own brand penetration from 25% to 28%, supporting margin growth. The 2025 outlook anticipates robust revenue growth driven by acquisitions and slight underlying growth, with operating margins expected to remain consistent with 2024 levels.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.