Broker snap: Credit Suisse downgrades Bunzl to underperform

16th Jan 2012 10:18

Credit Suisse has downgraded its rating for distribution and outsourcing firm Bunzl from neutral to underperform, saying the "valuation has gone too far"."We appreciate Bunzl's defensive, cash generative qualities at a time of macro concern, but after a strong run (34% in five months vs. FTSE All Share 11%) we believe there is now much more than resilience in the price," Credit Suisse said.The Swiss broker says that the stock now discounts an outlook "either materially more optimistic than other stocks or inconsistent with Bunzl's trackrecord for prudence and stability."Nevertheless, Bunzl's target price is lifted to 765p, from 750p previously. Bunzl's shares were trading down 0.74% at 876p by 10:15 on Monday morning after Credit Suisse noted better resilience elsewhere in the business services sector, such as G4S and Serco (both given outperform ratings).BC