Key Morningstar Metrics for Bunzl
- : GBX 3,280Fair Value Estimate
- : ★★★★Morningstar Rating
- : NarrowMorningstar Economic Moat Rating
- : HighMorningstar Uncertainty Rating
What We Thought of Bunzl’s Earnings
Underlying revenue and margin fell in 2025 due to weakness in North America and macro headwinds, in line with guidance. Management expects moderate revenue growth in 2026, driven by small underlying growth and acquisitions. Group margins are anticipated to be slightly down.
Why it matters: While macroeconomic headwinds persist in North America, including supply chain disruptions and weakness in its food end markets, organizational corrections give us greater confidence in the region’s ultimate recovery.
- Pricing decisions have been moved back to local markets, improving agility and response times essential to winning and maintaining local contracts.
- Sales pipeline management centralization strengthened new business wins in the second half of 2025, improving visibility into 2026. Its higher-margin own-brand penetration also improved following the reorganization.
The bottom line: We make no changes to our narrow moat rating or GBX 3,280 fair value estimate. Shares are undervalued.
- We are bullish on North America’s turnaround. Bunzl BNZL‘s struggles stem from short-term execution issues. However, Bunzl’s cost advantage remains intact and will continue bearing fruit in the long run.
- Once macro headwinds subside, Bunzl’s business model will once again return to healthy organic growth, bolstered by bolt-on acquisitions. We believe margins will then follow, as the company’s superior scale and expanding automation drive efficiencies.
