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Compass Group PLC CMPGY

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Narrow-Moat Compass Group Warming Up in Second Quarter

Michael Field, CFA Senior Equity Analyst

Analyst Note

| Michael Field, CFA |

Having prereleased its first-half results toward the end of the second quarter, there were no huge surprises in today’s update from narrow-moat Compass Group. That being said, trends continue to improve, with operating margins 20 basis points ahead of the 4% reported at quarter-end, and 150 basis points higher than the 2.7% delivered in the first quarter. The path to recovery may not be perfectly linear for Compass, but with its main exposures in the U.S. and the U.K., two regions in which the vaccination program is at an advanced stage, we believe things are definitely on the up. We reiterate our GBX 1,560 fair value estimate and believe the shares are now up with events.

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Company Profile

Business Description

Compass Group is the largest food-service company globally, operating in more than 50 countries with annual sales of almost GBP 25 billion. Compass Group’s model stems from operating on-premises catering facilities, rather than centralised industrial kitchens. Food services is Compass' core focus and contributes close to 85% of revenue. In addition, the company provides support services to clients through activities including cleaning services, office services (for example, concierge services), grounds maintenance, and so on.

Contact
Guildford Street, Compass House
Chertsey, Surrey, KT16 9BQ, United Kingdom
T +44 1932573000
Sector Consumer Cyclical
Industry Restaurants
Most Recent Earnings —
Fiscal Year End Sep 30, 2021
Stock Type —
Employees 548,132

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