Compass Group PLC (LSE:CPG) has been upgraded by Deutsche Bank, which rates the FTSE 100 group as the reference business model in the contract catering sector.
Before the pandemic disruption, topline sales growth was 5.1% on average between 2012 and 2019, while underlying profit margins (EBIT) at 7.1-7.4% were the highest across the sector.
For the years 2023-25, Deutsche Bank is predicting sales to rise by between 0.8-4% on average, but profits to do better at between 6.8-7.3%.
“Considering the company's impressive, solid track record (structurally outperforming its own guidance, consensus expectations and peers), we remain positive on the group's capability to deliver solid, accretive growth,” concluded the bank.
Deutsche Bank’s target price rises to 2,400p, from 2,160p, while the investment view goes to ‘buy' from ‘hold'.