Compass Group PLC (LSE:CPG) reassured any investors who had been doubting the catering giant with quarterly results that ticked most boxes, with some analysts saying the company is now entering a "sweet spot".
Barclays analysts said expectations had been "low" going into the results today, after a recent warning by French rival Sodexo that sales were lower than expected.
But the 10.3% organic growth number, while down on the previous two periods, beat the consensus forecast of 9.5%, so was taken well by the market.
An update on full-year guidance was also a slight improvement, the Barclays team said, with the language changing to "underlying operating profit growth above 15%" on a constant-currency basis, compared to "towards 15% EBIT growth" previously.
The positive tone in management's comments on net new contracts, retention and signings momentum "is key", the Barclays analysts said, "as this has been a source of concern for the last few Qs".
At Jefferies, analysts said the better-than-expected growth in organic revenue growth was "driven by an appealing reacceleration in net new momentum and better-than-expected like-for-like volume".
Their view is that net new business is likely to remain healthy because industry bid pipelines remain elevated.
"Compass is entering a sweet spot as high net new business, EBITA margin recovery, and M&A tailwinds converge," the Jefferies analysts said.
"Our proprietary analysis of market size and share confirms that industry outsourcing momentum has doubled since Covid, large peers are gaining share, and growth could remain elevated for a decade.
"We believe Compass’s organic sales could be 50%+ above pre-COVID in FY26F, but the shares trade in the middle half of the historical valuation range."