Narrow-Moat Compass Serves Up a Solid First Quarter

Things are looking up for narrow-moat Compass Group, with the first quarter of the year showing further operational improvement yet again. Organic revenue grew by almost 40%, albeit against a weak comparator number. But perhaps a more telling measure of its progress is the comparison to precoronavirus revenue, where the group is now at 97% of these levels, up from 88.5% last quarter. We fully expect this pattern of recovery to continue in 2022, with 2023 being the year where Compass climbs fully above 2019 activity levels. We reiterate our GBX 1,560 fair value estimate and believe the shares are currently up with events.