Compass Group PLC (LSE:CPG) shares were the biggest faller on the FTSE 100 on Wednesday, dropping 4.1% after BNP Paribas Exane double-downgraded its recommendation.
The catering giant's rating from the French bank moved to 'underperform' from 'outperform', with its price target cut to 2,500p from 3,000p.
Analysts at the bank cited concerns over client retention, particularly in the US healthcare sector, based on its proprietary data on US employee layoffs.
"This challenges a major pillar of our industry thesis, and we turn cautious on contract catering," it said.
"While the recent share price weakness in this long-term blue-chip compounder might seem like a buying opportunity, we take a different stance," the analysts wrote.
Additionally, BNP maintained an 'underperform' rating on French rival Sodexo (EPA:SW), keeping US group Aramark Corp (NYSE:ARMK) as its only ‘outperform’ pick among the giant listed caterers.