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(Sharecast News) - Analysts at Credit Suisse bumped-up their target price for shares of distribution products and services specialist Bunzl on the back of its recent above-trend growth in sales on the back of inflation, from 2,900.0p to 3,050.0p.
First quarter day-adjusted revenue growth reached 11.0% over the first quarter and around 21.0% in the company's core business.
That was despite the drag on the latter from an approximately 30% drop in revenues from Covid-related products year-on-year.
Its core business meanwhile was ahead by 14% relative to pre-pandemic levels.
Inflation-fuelled growth in North America and UK, in particular, were behind the improvement in Bunzl's topline.
FX tailwinds were also supporting sales, the broker added.
On the outlook, the Swiss broker said: "We expect growth rates to moderate during the year as comparables harden and input costs moderate, but still expect 10.5% organic growth in the core business, which remains well above historical trend growth."
Nonetheless, longer-term profit was seen running at 2.0%, although merger and acquisition activity was expected to provide a further boost.
Indeed, to the extent that Credit Suisse judged longer-term profit growth to be reflected in the share price, it kept its recommendation on the shares at 'neutral'.
As of 1604 GMT, shares of Bunzl were changing hands at a record high of 3,156.0p.
