Compass Group PLC (LSE:CPG) is "likely" to lift its financial outlook when it reports results, according to Citigroup.
The US investment bank thinks this will "drive improved sentiment" in the catering giant's shares following the numbers in mid-May.
"We see scope for a positive surprise," Citi analysts said, forecasting higher profit margins and revenue growth the consensus, leading to a potential 6% beat to operating profits (EBIT).
"The potential positive margin surprise is important for sentiment as, while Compass has consistently delivered predictably strong organic growth, the consensus does not anticipate adusted EBIT margins returning to 2019 levels of 7.4% until 2026."
The first half of this year is seen as "a sweet spot for margins", given the combination of cost and prices, like-for-like sales volumes momentum continuing "with ongoing return-to-office working and job creation in key sectors", and the impact of margin-dilutive net contract openings coming more in the second half.
"Accordingly, we expect management to raise guidance with results, while updates on M&A progress or disposals could be taken well."