Catering giant Compass Group PLC (LON:CPG) is pointing in the right direction, reckons US broker Jefferies, which has moved the price target dial on the stock up to 1,450p from 1,375p.
Ian Rennardson, analyst, argued that the "compounding" power and sustainability of the group's model means the shares deserve a premium valuation. He repeated a 'buy' rating.
Last week it reported better than expected sales despite weak performances in emerging markets and at its offshore business.
Overall underlying operating profits in the six months to end March rose 4.8% to £724million on a 5.8% increase in revenue to £9.7bn.
The group restructured divisions such as offshore and remote to take account of the weaker trading, and increased its interim dividend 8.2% to 10.6p.
Jefferies said its 2016 estimate for organic sales growth remained at 5.8% and stayed at that level through 2008.
It said this reflected a slight mix change with stronger organic growth in North America of 7.5% from 7% offsetting weaker RoW (rest of word), it noted.
Credit Suisse is also bullish on the shares today, upgrading Compass to 'neutral' from 'underperform'.
Elsewhere in broker land on Thursday insurer Admiral Group PLC (LON:ADM) is driven lower by heavyweight JP Morgan Cazenove, which moves to 'neutral' from 'underweight' .
Fashion chain Burberry Group PLC (LON:BRBY) is cut to 'neutral' from 'outperform', while Credit Suisse also cuts the target price to 1,000p from 1100p previously.
Cranswick plc (LON:CWK), the pork, sausage and meat specialist, is downgraded to 'hold' from 'buy' by Liberum.
MF