By Benjamin Chiou
Date: Tuesday 22 Jul 2025
LONDON (ShareCast) - (Sharecast News) - Shares in Compass jumped on Tuesday after a strong third-quarter update from the catering group, prompting broker Shore Capital to reiterate its longstanding 'buy' recommendation on the stock.
Analyst Greg Johnson noted in a research note that the stock's valuation multiple is currently at the higher end of the range its been over the past decade - EV/EBITDA of 14x, compared with the 12-15x range since 2015 excluding the pandemic years.
However, he said: "We continue to highlight the attractive long-term structural growth opportunity (organic growth of 6-8% vs 5% historically) and its proven ability to manage through inflationary periods and continued strong execution."
Johnson said he expects earnings per share estimates for the current year to be upgraded by a mid-single-digit percentage following Tuesday's update, in which Compass pointed to operating profit growth "towards 11%", compared with earlier guidance of a high single-digit improvement.
Organic growth in the third quarter came in at 8.6%, in line with the 8.5% growth recorded in the first half. Shore Capital had expected a "modest slowdown".
The stock was up 6.2% at 2,681p by 1108 BST.
| Currency | US Dollars |
| Price | $30.65 |
| Change Today | $0.16 |
| 52 Week High | $34.18 |
| 52 Week Low | $20.39 |
| Volume | 2,637,584 |
| Shares Issued | 1,700.44m |
| Market Cap | $52,119m |
| Strong Buy | 5 |
| Buy | 6 |
| Neutral | 7 |
| Sell | 3 |
| Strong Sell | 0 |
| Total | 21 |
