Compass Group PLC Stock Outlook, December 2025: Analyst Upgrades, AI Tailwinds and a Tempting Pullback

Updated 2 December 2025 – Not investment advice. For information only.

Compass Group share price today: quality business, bruised chart

Compass Group PLC (LSE: CPG), the world’s largest contract caterer, is ending November/starting December in a slightly paradoxical place: fundamentals are strong, but the share price looks tired.

As of 2 December 2025, Compass trades around 2,340–2,345p in London. MarketScreener shows a real‑time quote of 2,343p, with the stock down about 12% year‑to‑date. ^[1]
TradingView data indicate the shares are roughly 13% lower over the past 12 months, down about 7.5% over the past month and sitting close to their 52‑week low (range: 2,333p–2,853p). ^[2]
A MarketWatch recap of Monday’s session (1 December) noted Compass closed at £23.41, about 18% below its February high of £28.53, on above‑average trading volume. ^[3]

RBC Capital points out that the stock has underperformed the FTSE 100 by roughly 30 percentage points year‑to‑date, even though Compass continues to post robust earnings and cash generation. ^[4]

This disconnect between operations and share price is exactly what’s attracting fresh analyst interest.

FY25 results: double‑digit profit growth and strong cash flow

Compass reported results for the year ended 30 September 2025 on 25 November, delivering another year of solid growth. ^[5]

Key FY25 underlying (constant‑currency) metrics:

Revenue:$46.1bn, up 8.7%
Underlying operating profit:$3,335m, up 11.7%
Underlying operating margin:7.2%, up 10 bps
Underlying EPS: up 11.1% to 131.9c per share
Underlying free cash flow:$1,975m, up 13.5%
Dividend: total annual dividend up 10.2% to 65.9c per share ^[6]

Operationally, the growth engine remains North America:

Organic revenue growth:9.1% in North America, 7.7% in International
Net new business growth:4.5%, inside the group’s 4–5% structural target for a fourth consecutive year
Client retention: above 96%
New business wins: about $3.8bn of annualised revenue, up 11% year on year ^[7]

Margins nudged higher, with underlying operating margin reaching 7.3% in H2, and cash conversion remained very strong at 88%. ^[8]

In other words: Compass is behaving exactly like a mature “compounder” is supposed to behave—mid‑single‑digit to high‑single‑digit revenue growth transmuted into slightly faster profit and dividend growth, backed by heavy but disciplined reinvestment.

Outlook for 2026: slower revenue, still healthy profit growth

The main “speed bump” in the narrative is not demand, but inflation normalisation.

For the financial year to September 2026, Compass guides to: ^[9]

Organic revenue growth: around 7%
Underlying operating profit growth: around 10%
Contribution from M&A (including Vermaat): roughly 2 percentage points of profit growth
Continued margin progression

Reuters summarised the market reaction succinctly: revenue growth is expected to moderate in 2026 as inflation cools, which removes some of the “price tailwind” that boosted top‑line growth in recent years. Shares fell about 3% on the day despite the earnings beat and double‑digit profit growth. ^[10]

Management, meanwhile, reiterated its long‑term algorithm:

Mid‑to‑high single‑digit organic revenue growth
Ongoing margin expansion
Profit growth ahead of revenue over the cycle ^[11]

That’s essentially saying: “we’re done dining out on high inflation, now we go back to good old‑fashioned volume and new‑business growth.”

Strategy and growth drivers: outsourcing, AI and the Vermaat deal

Compass’s growth story rests on three big structural planks.

1. Outsourcing tailwind and under‑penetrated market

Compass estimates its total addressable market at around $360bn, and RBC notes the company still has less than 15% market share globally. ^[12]

In practice, that means:

Lots of businesses, hospitals, universities and public‑sector bodies still run catering in‑house.
As labour markets stay tight and compliance becomes more complex, outsourcing becomes more attractive.

Compass’s net new business growth of 4.5%—on a base the size of a small country’s GDP—is concrete evidence that this structural shift is still underway. ^[13]

2. AI and data‑centre boom

A recent Financial Times piece highlighted how Compass is actively targeting the AI infrastructure boom—data centres and tech campuses need to feed a lot of people, often in remote locations. ^[14]

Key points from that coverage:

Major tech companies are set to invest over $300bn in data centres this year.
Compass already caters on some data‑centre construction sites and aims to deepen that role into ongoing operations.
Office‑based tech firms, eager to tempt employees back and improve retention, lean on high‑quality catering as part of the package.

So while “AI” is usually talked about as a threat to jobs, for Compass it also translates into new sites, new facilities and long‑term catering contracts.

3. M&A and the Vermaat acquisition

In July, Compass announced its largest deal ever: the acquisition of Vermaat Groep, a premium European food‑services operator, for about €1.5bn (c.$1.8bn) including debt. ^[15]

Vermaat is expected to generate around €700m of sales in 2025 with double‑digit operating margins. ^[16]
It strengthens Compass’s footprint in high‑end locations such as museums and galleries across the Netherlands, France and Germany. ^[17]

Management spent $1.5bn on capex and $1.3bn on M&A in FY25 while still growing free cash flow and dividends—suggesting the balance sheet has room for disciplined bolt‑ons. ^[18]

Analyst sentiment: upgrades and a 20–25% upside consensus

Analysts have been busy in the wake of Compass’s FY25 report.

Fresh upgrades

RBC Capital Markets upgraded Compass from “sector perform” to “outperform” on 1 December, lifting its price target from 2,700p to 2,775p. ^[19]
- RBC argues that market worries about GLP‑1 weight‑loss drugs and AI‑driven workplace changes are overdone, and that the recent derating gives investors an “attractive entry point into a high‑quality compounder.” ^[20]
Citigroup upgraded Compass from “neutral” to “buy” on 27 November, with a new target of 3,000p (up from 2,750p), implying mid‑20s percentage upside from current levels. TS2 Tech+1

Multiple other brokers, including Deutsche Bank, Jefferies and Berenberg, have reiterated or raised “buy” ratings with targets clustered between 2,700p and 3,000p. ^[21]

Consensus picture

Depending on the data provider, you get slightly different flavours of the same message:

Investing.com:
- 19 analysts, consensus rating “Buy”
- Average 12‑month target around 2,848p, with a range of roughly 2,195p–3,234p, implying about 21–22% upside from current levels. ^[22]
MarketScreener:
- 19 analysts, mean consensus “Outperform”
- Average target about +21.6% above the latest close (quoted in USD, but economically similar to Investing.com’s GBP numbers). ^[23]
MarketBeat:
- 6 analysts, consensus “Moderate Buy”
- Average target 2,920p (range 2,700p–3,000p), implying roughly 25% upside versus a current price near 2,343p. ^[24]

The through‑line: professional coverage skews clearly positive, but not euphoric. Analysts see a high‑quality compounder that has de‑rated, not a deep‑value “turnaround.”

Valuation, balance sheet and dividend: not cheap, but not wild

Valuation

On most metrics, Compass still trades at a quality premium, though less so than at the February peak.

MarketScreener puts the FY25 P/E at ~26x, falling to around 22x for FY26 on current estimates. ^[25]
Yahoo Finance’s OTC listing (CMPGY) shows a trailing P/E around 28x and forward P/E around 16–17x, reflecting stronger forecast earnings growth in dollar terms. ^[26]
TradingView lists a market capitalisation of about £40.3bn, and notes the stock has de‑rated while EBITDA margins and cash flows remain healthy. ^[27]

So this isn’t a bargain‑basement multiple, but relative to:

Double‑digit profit growth,
Strong free cash flow, and
Highly visible contracts in non‑cyclical end markets,

many analysts are comfortable calling it “growth at a reasonable price.” ^[28]

Balance sheet and liquidity

MarketBeat data paint the following picture: ^[29]

Quick ratio: ~0.86
Current ratio: ~0.74
Debt‑to‑equity: ~86.5%
Beta: ~0.8

Those numbers say:

The business is capital‑light but working‑capital hungry (hence sub‑1 current ratios), and
It uses a meaningful amount of leverage, but with relatively low share‑price volatility and strong cash flow backing it up.

Given it generated almost $2bn of free cash flow while spending a combined $2.8bn on capex and M&A in FY25, leverage doesn’t look excessive at current interest rates. ^[30]

Dividend and yield

Compass remains a dividend‑growth story rather than an income stock.

FY25 total dividend: 65.9c per share, up 10.2% year on year. ^[31]
Policy: pay out around 50% of underlying earnings via an interim and final dividend. ^[32]
The board has proposed a final dividend of 43.3c per share, payable on 26 February 2026, taking the full‑year payout to that 65.9c figure. ^[33]
Based on the current share price, the trailing dividend yield is roughly 2.0–2.1%. ^[34]

The dividend, in other words, is more of a confirmation signal of earnings strength than the main attraction of the equity story.

Technical picture: a rare pullback for a serial winner

From a pure chart perspective, Compass does not currently look like a momentum stock:

TradingView’s automated technical ratings flag the shares as a “sell” on daily and weekly timeframes, with the price trading below both the 50‑day and 200‑day moving averages. ^[35]
MarketBeat notes the 50‑day average around 2,514p and the 200‑day around 2,554p, versus a spot price in the low‑2,300s. ^[36]

Proactive Investors highlights that this share‑price pullback, coming immediately after strong FY25 numbers and upbeat guidance, presents an “appetising entry” in RBC’s view. ^[37]

So:

Fundamentals: pointing up.
Chart: pointing down.

That tension is exactly what creates opportunity—or risk—for different types of investors.

Key risks: GLP‑1, AI, labour costs and execution

No investment case is bullet‑proof. For Compass, the main issues to watch include:

GLP‑1 weight‑loss drugs
- Some investors worry that widespread adoption of GLP‑1 agonists could reduce calorie consumption and, eventually, food volumes.
- RBC acknowledges the concern but argues that the risk is overstated, given Compass’s diversified client base and ability to adjust portion sizes, menus and pricing, as well as the relatively small share of the global population currently on these drugs. ^[38]
AI, hybrid work and office usage
- AI and remote‑work tools may shrink white‑collar workforces or reduce time spent in the office, pressuring some corporate catering volumes.
- At the same time, AI infrastructure creates new data‑centre and tech‑campus sites, and employers use food quality as a retention and return‑to‑office lever. ^[39]
- Net impact is still uncertain and will likely play out gradually over years, not quarters.
Labour and food‑cost inflation
- Catering is a people‑heavy business. Wage inflation, staff shortages and food‑price volatility can squeeze margins if Compass mis‑prices contracts or fails to pass costs through.
- Recent results show steady margin expansion, but there is always execution risk at contract renewal. ^[40]
M&A and integration risk
- Large deals like Vermaat promise synergies but also carry the risk of overpaying or integration mis‑steps.
- Management says integration of recent acquisitions is ahead of schedule and contributing to profit growth, but investors will want to see that continue. ^[41]
FX and interest‑rate environment
- With substantial US exposure and reporting in dollars, Compass is exposed to currency swings, and higher interest rates lift financing costs on its sizeable debt stack. ^[42]

So, is Compass Group stock a buy after the pullback?

What the current information (as of 2 December 2025) suggests:

Business quality: very high. Leading global scale, sticky contracts, strong cash generation, and an attractive structural tailwind from outsourcing and AI‑related infrastructure. ^[43]
Near‑term growth: moderating top‑line growth in 2026 as inflation normalises, but still mid‑single‑digit organic revenue growth and ~10% profit growth guided by management. ^[44]
Valuation: not cheap in absolute terms (mid‑20s P/E), but meaningfully lower than at the February peak and supported by a consensus view of ~20–25% upside over 12 months. ^[45]
Sentiment: shifting positively, with fresh upgrades from RBC and Citi following an earnings beat, even as the chart still shows a downtrend. ^[46]

For long‑term investors who are comfortable with: