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Compass Group PLC

CPG: XLON (GBR)
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Morningstar Rating for Stocks Fair Value Economic Moat Capital Allocation
GBX 7,936.00KjhtdzPxwtksy

Compass Group Momentum Carrying Through Into 2024

Business Strategy and Outlook

Compass Group is the largest food-service provider internationally and one of the most entrenched. Its extensive footprint serves a diversified mix of sectors and geographies, providing the foundation for a narrow economic moat that generates consistent revenue streams and healthy cash flow. Combining this dynamic with an asset-light operating structure leads to strong returns on invested capital. Demand for Compass' services is moderately tied to both consumer and enterprise-level discretionary spending, which adds some cyclicality. Nevertheless, Compass appears well positioned to grow as enterprise-level outsourcing gains traction for the longer term.

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