Update shared on 29 Nov 2025
Fair value Decreased 0.91%Analysts have modestly lowered their fair value target for Compass Group from £28.64 to £28.38, reflecting slightly softer long-term growth and margin expectations. However, continued upgrades elsewhere suggest confidence in the company's improving fundamentals.
Analyst Commentary
Recent updates from major research firms reflect a broadly positive outlook for Compass Group, with upward revisions to price targets and ratings signaling growing market confidence in the business’s strategic progression.
Bullish Takeaways- Bullish analysts highlight sustainably enhanced long-term EBITA growth, supporting expectations for improved profitability and the company’s ability to achieve above-market returns.
- Compass Group's strengthened platform for European expansion is viewed as a key driver of future growth, supporting the case for higher valuation multiples.
- Recent price target increases from leading global investment banks indicate consensus that material upside remains as the company continues to execute effectively.
- An improved returns profile is noted as a competitive differentiator, with current share prices seen as not fully reflecting these positive developments.
- Some analysts express caution regarding the sustainability of growth rates across all regions, noting that elevated expectations may increase execution risk.
- Modest downside adjustments to long-term targets suggest that challenges around margins remain, particularly amid a shifting macroeconomic backdrop.
- Valuation concerns persist, with shares trading at a premium to historical averages, increasing sensitivity to any future disappointments in financial performance.
What's in the News
- Proposed final dividend of 43.3 cents per share for 2026, increased from 39.1 cents per share in 2024, resulting in a total annual dividend of 65.9 cents per share (Key Developments)
- Aggregate dividend distribution for 2026 is projected at $735 million, scheduled to be paid on 26 February 2026 to shareholders registered as of 16 January 2026 (Key Developments)
- Earnings guidance for 2026 has been issued, with a target of underlying operating profit growth of around 10 percent in constant currency, supported by expected organic revenue growth of approximately 7 percent (Key Developments)
Valuation Changes
- Fair Value Target: Lowered modestly from £28.64 to £28.38, reflecting updated expectations.
- Discount Rate: Increased slightly from 8.83% to 8.84%.
- Revenue Growth Assumption: Marginally reduced from 7.49% to 7.48% per year.
- Net Profit Margin: Decreased from 5.20% to 5.07%.
- Future Price/Earnings Ratio: Lowered from 29.13x to 28.35x.
Disclaimer
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