Published: 3 December 2025 – For information only, not investment advice.
Share price today: quality business, tired share price
Compass Group PLC (LON: CPG) is ending 2025 in an awkward position: the business is putting up strong numbers, but the share price is behaving like it has lost its appetite.
As of the close on 3 December 2025, Compass shares trade around 2,338p in London, with a bid–ask spread of 2,337p–2,339p. [1]
Key market stats today:
- Market cap: about £39.7 billion [2]
- 52‑week range: roughly 2,326p–2,853p, with the current price hugging the bottom of that band [3]
- 1‑year performance: down roughly 14–16% over the past 12 months, even as the broader FTSE 100 has held up better [4]
In other words, investors are getting a blue‑chip compounder at a price the market last saw during brief drawdowns, not during boom times.
The weakness isn’t limited to London: the US OTC‑traded ADR (CMPGY) recently saw a 160% jump in daily trading volume to about 732,000 shares, even as the price slipped to around $31. [5] That looks like renewed interest from US investors — but not yet a bullish stampede.
FY25 results: double‑digit profit growth, higher dividend
The share price gloom sits awkwardly beside a robust set of full‑year numbers for the year to 30 September 2025.
From Compass’s FY25 results and earnings call: [6]
- Statutory revenue:$46.1 billion, up 9.7% year on year
- Organic revenue growth:8.7% at constant currency
- Underlying operating profit:$3.34 billion, up 11.7%
- Underlying operating margin: up to 7.2% (7.3% in H2) from 7.1%
- Underlying EPS: up 11.1% to 131.9c
- Underlying free cash flow: about $2.0 billion, with cash conversion around 88%
- Net debt / EBITDA: about 1.4x, within the company’s target range of 1–1.5x
Management proposed a total FY25 dividend of 65.9c per share, up 10.2% year on year and consistent with the policy of paying out around half of underlying earnings. [7]
Operationally, the growth engine remains North America and the company’s large‑scale contract catering model:
- North America organic revenue growth: a little over 9%
- International organic revenue growth: just under 8% [8]
- Net new business growth:4.5%, the fourth consecutive year within Compass’s structural 4–5% target range
- Client retention: above 96%
That combination — mid‑ to high‑single‑digit organic revenue growth, slightly faster profit growth and robust cash generation — is precisely the profile many investors associate with a “quality compounder”.
Strategy: outsourcing, Vermaat and the AI/data‑centre tailwind
Compass’s story in 2025 is not about a radical pivot; it’s about pushing the same long‑running themes harder.
A huge, still‑fragmented market
Compass estimates its total addressable market in food services at roughly $360 billion, and it still holds under 15% global market share. [9]
Most of that market is either self‑operated (in‑house canteens at companies, hospitals, universities, etc.) or served by smaller regional players. That leaves a lot of runway for first‑time outsourcing:
- Around 45% of gross new business wins are coming from customers outsourcing for the first time, according to management and RBC. [10]
This is structurally important: it means Compass isn’t just stealing share from rivals, it is helping to create the outsourced market it then dominates.
Vermaat: scaling premium European food services
In July 2025, Compass agreed to acquire Vermaat Groep, a premium European food‑services operator, for roughly €1.5 billion (about $1.8 billion) including debt — the largest deal in the group’s history. [11]
Vermaat specialises in high‑end locations like museums, galleries and upmarket workplaces in the Netherlands, France and Germany, with around €700 million of expected 2025 sales and double‑digit margins. TS2 Tech
The acquisition fits Compass’s strategy of:
- Deepening its presence in premium urban venues
- Adding more “retail‑style” concepts and branded experiences
- Raising the overall margin profile of its International division
Management says integration of recent deals is “ahead of schedule” and that M&A is now a meaningful contributor to profit growth, not just a source of revenue. [12]
AI, data centres and the GLP‑1 weight‑loss debate
Two big macro narratives that initially worried investors — AI and GLP‑1 weight‑loss drugs — are now being reframed as manageable, or even helpful, for Compass.
In a note published on 1 December, RBC Capital Markets upgraded Compass to “Outperform” from “Sector Perform” and raised its price target to 2,775p (from 2,700p). [13]
RBC’s key points: [14]
- AI‑driven build‑outs of data centres and tech campuses create more sites that need feeding, often on a large scale and in remote locations.
- GLP‑1 drugs may change calorie consumption patterns, but Compass can mitigate this through menu mix and pricing, and its contracts are often volume‑plus‑pricing structures rather than pure per‑meal bets.
- Business & Industry (B&I) — roughly 39% of sales — remains the fastest‑growing vertical as office attendance and corporate hospitality gradually normalise.
The bank argues that AI and GLP‑1 fears have been “overdone”, and that Compass is actually winning new accounts in the AI ecosystem rather than losing out to robots and salad pills. [15]
Guidance for 2026: slower top line, still healthy profit growth
If there’s a cloud in the near‑term narrative, it’s normalising inflation. Management is explicit that revenue growth will likely slow as the “price” tailwind fades.
For the financial year to September 2026, Compass guides to: [16]
- Organic revenue growth: around 7%
- Underlying operating profit growth: around 10%
- Contribution from M&A (including Vermaat): roughly 2 percentage points of profit growth
- Ongoing margin progression, helped by scale, mix and efficiency
Underlying finance costs are expected to rise to roughly $350 million in FY26, reflecting higher debt after acquisitions, and the effective tax rate should stay around 25.5%. [17]
Leverage is expected to tick above the 1–1.5x target range during 2026, peaking at mid‑year as Vermaat completes, before drifting back down as earnings and cash flow catch up. [18]
The long‑term algorithm remains unchanged:
- Mid‑ to high‑single‑digit organic revenue growth
- Gradual margin expansion
- Profit growth ahead of revenue over the cycle [19]
Analyst sentiment and price targets: double‑digit upside from here
The pullback in Compass’s share price has triggered a wave of fresh analyst attention.
Recent upgrades
- RBC Capital Markets: Upgraded to “Outperform” with a 2,775p target, arguing the recent derating creates an “attractive entry point” into a high‑quality compounder that has underperformed the FTSE 100 by about 30 percentage points year‑to‑date. [20]
- Several other brokers, including global investment banks, have either reiterated or raised Buy/Outperform ratings with targets generally clustered between 2,700p and 3,000p, according to aggregated data. TS2 Tech+1
Consensus across major data providers
Different platforms slice the data slightly differently, but they all point in roughly the same direction:
- MarketBeat (London listing CPG):
- 6 analysts
- Consensus rating: “Moderate Buy”
- Average 12‑month target: about 2,920–2,935p
- Implied upside: roughly 25–26% from a spot price in the low‑2,300s [21]
- TipRanks (GB:CPG):
- 11 Wall Street analysts over the last three months
- Average target around 2,990p, with a range from roughly 2,775p to 3,155p
- Implied upside: about 26% versus recent prices [22]
- Composite data reported in recent media coverage suggest 18–20 analysts overall, with a broad “Buy / Outperform” consensus and mid‑teens to mid‑20s percentage upside to the average target. TS2 Tech+1
In short, the professional analyst community sees Compass as fundamentally sound and modestly undervalued at current levels, not as a deep‑value distressed story.
Valuation check: premium multiple vs intrinsic‑value models
The tricky part is valuation. Compass has almost always traded at a premium to the broader UK market, and that hasn’t vanished — it’s just a bit less lofty than at the February 2025 peak.
Earnings multiples
On current numbers:
- Hargreaves Lansdown puts Compass’s trailing P/E at about 23.4x, with a dividend yield just over 2% and a market cap near £39.7bn. [23]
- Financial data providers such as MarketScreener and others, as cited in recent coverage, show a FY25 P/E in the mid‑20s, falling to the low‑20s on FY26 estimates — broadly in line with the stock’s 10‑year average multiple. TS2 Tech+1
RBC emphasises that this derating has brought the forward P/E back in line with its long‑run average of around 21.5x, shifting Compass into “growth at a reasonable price” territory rather than bubble land. [24]
Intrinsic value vs market price
Not everyone thinks the current price is a bargain. A recent Simply Wall St discounted cash‑flow (DCF) model estimates Compass’s fair value at about £18.73 per share, versus a real‑world price of roughly £23.71 at the time of the analysis — implying the shares were about 27% overvalued on that particular set of assumptions. [25]
Their summary:
- Strong earnings and cash flows
- Dividends well covered
- But a rich P/E and a share price above DCF‑based intrinsic value, leading them to flag Compass as “expensive” on their framework. [26]
Data from TipRanks also show:
- A technical sentiment flagged as “Sell”
- An AI‑driven composite score (“Spark”) rating the stock Neutral, balancing robust fundamentals against valuation and chart signals. [27]
The message for investors is that quality is not the question; the real debate is whether paying low‑20s earnings multiples for that quality still leaves enough upside.
Shareholder track record: a strong five‑year run, recent pause
Despite the pullback in 2025, long‑term shareholders have done extremely well.
According to Simply Wall St: [28]
- Over the last five years, Compass’s share price has risen about 121%
- Total shareholder return (TSR), including dividends, is around 137%, equating to roughly 19% per year
- EPS over that period grew more slowly than the share price (about 0.5% per year vs ~17% annual share‑price growth), implying investors have been willing to pay more for each pound of earnings
Over the last 12 months, however, TSR has cooled to roughly 2–3%, lagging the wider UK market. [29] That slowdown — despite strong FY25 results — is exactly what has reopened the argument about whether Compass is a compounder on sale or a quality name that simply got too expensive.
Balance sheet, capital structure and US access
Compass continues to position itself as a capital‑light, cash‑generative business with disciplined leverage:
- Net debt / EBITDA: around 1.4x after a year of heavy capex and M&A [30]
- Capex: roughly 3.3% of revenue, expected to drift towards 3.5% in the year ahead as the group keeps investing in growth and technology [31]
A recent regulatory filing on voting rights shows: [32]
- 1,785,403,977 ordinary shares issued
- 87,973,798 held in treasury
- 1,697,430,179 shares in public hands, each carrying one vote
In late November, OTC Markets Group announced that Compass shares now trade on the OTCQX International tier under the symbol CMPGF, improving visibility and access for US investors. [33]
That combination of a large, liquid London line plus more accessible US trading helps explain why ADR volumes have started to spike even during a share price lull. [34]
Risk factors to watch
Even bullish analysts flag a number of risks and caveats.
From company disclosures, earnings calls and independent research: [35]
- M&A and integration risk
- Vermaat and multiple bolt‑on deals have to be integrated without eroding margins.
- The International division still trails North America by roughly 200 basis points of margin, leaving room for both improvement and disappointment.
- Leverage and rising interest costs
- Net debt is currently comfortable, but interest expense has already risen to about $315m and is expected to climb to $350m in FY26.
- Management expects leverage to move above the target range temporarily in 2026 as acquisitions bed in.
- Economic and employment cycles
- Business & Industry accounts for roughly 39% of sales, Healthcare & Seniors for 23%, Education 18%, Sports & Leisure 14%, and Defence/Offshore/Remote about 6%. [36]
- A downturn in white‑collar employment, remote‑work reversals or cutbacks in discretionary corporate spending would hit the largest vertical first.
- Behavioural and technological shifts
- AI continues to reshape how and where people work; while currently a tailwind in data centres and tech campuses, the long‑term net effect is still uncertain. [37]
- Widespread uptake of GLP‑1 drugs could, in theory, dampen food volumes, though Compass and RBC both argue that pricing and product mix provide significant flexibility. [38]
- Competition
- Global rivals such as Aramark and Sodexo are also chasing outsourcing opportunities; recent Reuters coverage notes that while Aramark has issued an upbeat outlook, Sodexo has warned on slower growth amid contract losses. TS2 Tech
- Valuation risk
- Models like Simply Wall St’s DCF suggest Compass still trades above some estimates of intrinsic value, meaning any stumble in execution or macro conditions could have an outsized impact on the share price. [39]
Key dates in 2026
For investors tracking catalysts, Compass’s own financial calendar highlights several important milestones: [40]
- 15 January 2026 – Ex‑dividend date for the 2025 final dividend
- 16 January 2026 – Record date
- 5 February 2026 – AGM and Q1 trading update
- 26 February 2026 – Final dividend payment date
- 11 May 2026 – Half‑year results
- 21 July 2026 – Q3 trading update
- 24 November 2026 – Full‑year 2026 results
These events will give the market more data on whether FY26 guidance — especially the 7% organic growth and 10% profit growth — proves conservative or optimistic.
Bottom line: mis‑priced quality or still‑expensive compounder?
As of 3 December 2025, Compass Group PLC presents an unusual combination:
- Fundamentals: strong, with double‑digit profit growth, high cash conversion, rising dividends and a long runway in global outsourcing. [41]
- Share price: sitting close to a 52‑week low and well below its February high, after underperforming the FTSE 100 by roughly 30 percentage points this year. [42]
- Analysts: broadly positive, with consensus “Buy/Outperform” ratings and mid‑20s percentage upside to average 12‑month price targets. [43]
- Valuation models: split, with conventional multiples back at long‑run averages but some intrinsic‑value frameworks still calling the stock overvalued. [44]
Whether investors see Compass Group PLC stock as a rare pullback in a serial winner or as a solid business still priced for perfection depends on how much weight they put on each of those pieces: the earnings machine, the market’s current pessimism, and the models humming quietly in the background.
Either way, Compass will remain a closely watched bellwether for global contract catering — and for the broader question of how much investors are willing to pay for reliable, compounding cash flows in a world that keeps changing how and where people eat.
References
1. www.hl.co.uk, 2. www.hl.co.uk, 3. www.hl.co.uk, 4. markets.ft.com, 5. www.marketbeat.com, 6. www.compass-group.com, 7. www.compass-group.com, 8. www.compass-group.com, 9. www.compass-group.com, 10. www.investing.com, 11. www.compass-group.com, 12. www.compass-group.com, 13. www.investing.com, 14. www.investing.com, 15. www.investing.com, 16. www.compass-group.com, 17. www.compass-group.com, 18. www.compass-group.com, 19. www.compass-group.com, 20. www.investing.com, 21. www.marketbeat.com, 22. www.tipranks.com, 23. www.hl.co.uk, 24. www.investing.com, 25. simplywall.st, 26. simplywall.st, 27. www.tipranks.com, 28. simplywall.st, 29. simplywall.st, 30. www.compass-group.com, 31. ca.investing.com, 32. www.tipranks.com, 33. finance.yahoo.com, 34. www.marketbeat.com, 35. www.compass-group.com, 36. www.investing.com, 37. www.investing.com, 38. www.investing.com, 39. simplywall.st, 40. www.compass-group.com, 41. www.compass-group.com, 42. www.lse.co.uk, 43. www.marketbeat.com, 44. simplywall.st
