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Investing.com - Goldman Sachs upgraded Compass Group (LSE:CPG) (OTC:CMPGY) from Neutral to Buy and raised its price target to GBP30.00 from GBP25.00.
The global contract catering company’s shares have de-rated by approximately 10% year-to-date on a next-twelve-months EV/EBITA basis, according to Goldman Sachs.
Goldman Sachs believes Compass Group has a "sustainably enhanced long-term EBITA growth algorithm, a strengthened platform for European growth and an improved returns profile" that are not fully reflected in its current valuation.
The investment bank projects Compass will deliver approximately 7% organic growth over fiscal years 2025-2029, alongside a low-double-digit organic EPS compound annual growth rate and a 2.5% dividend yield.
Goldman Sachs also highlighted that Compass Group offers "among the highest returns profiles (ROIC and CROCI)" in its coverage universe, describing the company as a "high-quality compounder with defensive characteristics."
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