Shares in Bunzl gain 1.6 percent, topping the list of FTSE 100
risers with traders citing Citigroup's ratings upgrade of the business
services firm to "buy" on valuation grounds.
In a broader note on business services firms, Citigroup says Bunzl's 11
percent 3 month relative underperformance has returned valuation to an
"2013E volume growth should remain robust with cost efforts and UK recovery
offsetting product deflation margin drag," says the investment bank in a note.
"Bunzl remains one of our sector's 'Cash Flow Kings', partly thanks to its
attractive working capital dynamics, and we're confident it can continue to
drive double digit post-tax bolt-on returns while growing its dividend by 10
percent per annum," it says.
On the broader business services sector Citigroup backs structural growers
and high cash converters in a lower growth world abundant with macro risk, and
remains cautious on cyclical names with heavy euro zone exposure.
It most keen on Aggreko, Bunzl, Capita, Intertek
and Serco, while its least favoured stocks include Adecco,
Randstad, Electrocomponents, Premier Farnell and
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