Compass Group PLC's (LSE:CPG) smooth upward progress was rocked a little earlier this month by French rival Sodexo's warning that sales were lower than expected in the third quarter.
UBS notes that as Compass will only be reporting organic revenue next week there is little scope for incremental upgrades to guidance of the type that accompanied the first-half update.
The Swiss bank still expects good numbers from the contract caterer, noting that Sodexo reported strong growth in North America (+9%), the region to which Compass is most exposed.
Contract losses from the second half of 2023 should also have washed through leading to easier comparisons.
UBS forecasts third-quarter organic revenue growth of 9.4% (2Q24 c10.7%; 1Q24 11.7%).
“For the full year, our organic revenue forecast stands at 10.6% vs cons. and guidance at 10%.
“Our FY operating profit forecast of $2,986 million is broadly in line with consensus.
“Investor sentiment on Compass is almost exclusively positive based on our conversations and the company screens as having a 'crowded long position'."