Compass Group PLC (LSE:CPG) shares fell 2.9% after the catering giant reported half-year results that contained slightly slower growth in the past quarter.
Organic growth moderated to 8.5% in the six months to March 2025 from 9.2% in the first quarter, with guidance for 7.5% growth over the full year remaining unchanged, including net new business of 4.4%.
Underlying profit grew 11.6% to $1.6 billion, with margin edging up to 7.2% from 7.1%, as the FTSE 100 group simultaneously completed the exit from four countries.
After a $500 million share buyback was announced in November 2023 was completed in December 2024, with the board approving an interim dividend of 22.6c per share, up 9.2% on the prior year's interim dividend.
Analysts at Panmure Liberum noted that the net debt/EBITDA ratio edged up to 1.5x, at the high end of 1.0x-1.5x target range, "hence limited scope for share buybacks to be resumed this year".
With the shares down 2.1% in the year to date and up 13.0% over the last 12 months, benefiting from the company's defensive characteristics, there is now "concern around the sustainability of growth in North America", the analysts added.
The potential for upgrades and buybacks has "paused", Panmure Liberun said, leading to their ongoing 'hold' rating.
Analysts at Shore Capital pointed out that the slowing in growth was minimal but agreed that the share price valuation "remains rich and at the higher end of its historic trading range".
However, although there "appears little obvious catalyst for a rerating, bar modest upside risk to estimates," Shore Cap retained its 'buy' recommendation, seeing the key attraction as "the consistency of growth (although cracks have started to appear at peers), the long-term structural market opportunity (with higher sustainable growth rates baked in), and margins continuing to build modestly".