Updated 8 December 2025 — All figures in USD or GBP as stated. This article is for information only and is not investment advice.
Snapshot: Compass Group PLC on 8 December 2025
As of Monday, 8 December 2025, Compass Group PLC (LON: CPG; OTC: CMPGF / CMPGY) sits in that oddly interesting place where fundamentals look strong, but the share price still sulks.
Key data points today:
- Share price: Compass closed at 2,359p in London on 8 December 2025, down about 0.5% on the day. [1]
- Trading range: The stock is hovering just above its 12‑month low around 2,344p, and roughly 17% below its peak near 2,853p, with a market capitalization around £40–41 billion. TechStock²+1
- US ADRs: The main US over‑the‑counter line, CMPGY, recently traded in the low $30s (around $31.5 at the 5 December close). [2]
- YTD performance: A fresh Finimize note calculates that Compass shares are down roughly 12% in 2025, despite a year of double‑digit profit growth. [3]
- Consensus upside: City and Wall Street analysts cluster around 2,980–3,000p 12‑month price targets on the London line, implying about 26–27% upside from current levels. [4]
On 8 December, the narrative is being pulled in two directions at once:
- On one side: a £31 price target and bullish 2026 forecasts from Berenberg, plus a string of upgrades from RBC, Citi and others. [5]
- On the other: renewed focus on insider selling, even as management pockets fresh long‑term share awards. [6]
Let’s unpack what’s going on.
Today’s headlines (8 December 2025): Berenberg goes to £31, insiders trim stakes
Berenberg raises the bar
A new note highlighted by Finimize on 8 December says Berenberg has lifted its Compass Group price target to £31 per share, comfortably above most other brokers. [7]
According to that coverage, Berenberg:
- Expects around 7.5% organic revenue growth in the year to September 2026.
- Projects about 11.3% operating profit growth in 2026.
- Sees the stock trading at roughly an 8% discount to its own historical average valuation, even after years of steady earnings upgrades. [8]
That stance is deliberately more optimistic than management’s own guidance (around 7% organic growth and ~10% operating profit growth for 2026), suggesting Berenberg thinks Compass is sand‑bagging a little. [9]
Finimize framing: “quality trading at a discount”
Finimize’s piece on 8 December distils the situation into a neat headline: strong 2025, robust outlook, but a share price that hasn’t kept up. It notes that:
- Compass has wrapped up 2025 with stronger earnings and strategic acquisitions (notably Vermaat). [10]
- Analysts at Berenberg think the current derating vs. history doesn’t line up with the company’s operational momentum. [11]
In other words, the bulls see a “compounder temporarily out of favour,” rather than a broken business.
Simply Wall St flags insider selling
On the same day, Simply Wall St published a contrasting note: “Don’t Ignore The Insider Selling In Compass Group.” [12]
Key points from that analysis:
- CEO Dominic Blakemore recently sold shares worth about £2.5 million at an average price near £23.41, cutting his holding by around 14%. [13]
- Over the last year, insider sales have outweighed insider purchases, which the author views as a cautious signal. [14]
- Overall insider ownership remains modest at roughly 0.06% of the company, estimated at about £25 million. [15]
However, a fresh regulatory filing (RNS) shows that these sales sit alongside sizeable long‑term incentive awards:
- On 1 December 2025, Blakemore and fellow executives received new conditional share awards under Compass’s deferred bonus and long‑term incentive plans, while also selling some shares to meet tax and social‑security liabilities. [16]
So the insider picture is nuanced: there is net selling in recent months, but also continuing equity‑based incentives and still‑meaningful executive holdings.
Core story: another year of double‑digit profit growth
Under the hood, Compass keeps doing what long‑time shareholders expect: turning steady contract wins into slightly faster profit and cash‑flow growth.
FY25 results at a glance
For the year to 30 September 2025, Compass reported: [17]
- Revenue: $46.1 billion, up 8.7% on an organic basis and 9.7% in statutory terms.
- Underlying operating profit: $3,335 million, up 11.7%, with the underlying margin nudging up from 7.1% to 7.2% (and 7.3% in the second half).
- Underlying EPS: 131.9c, up 11.1%.
- Underlying free cash flow: $1,975 million, up 13.5%, with cash conversion around 88%.
- Dividend: total annual dividend per share increased 10.2% to 65.9c.
Operationally the engine is still North America:
- Organic revenue growth: 9.1% in North America, 7.7% in International. [18]
- Net new business growth: 4.5% — the fourth consecutive year in management’s 4–5% structural target range.
- Client retention: above 96%.
- New business wins: about $3.8 billion of annualised revenue, up 11% year on year. [19]
A Reuters piece emphasised that strong demand for US office canteens, including a flagship contract to run dining facilities at JPMorgan’s new New York headquarters, helped Compass beat market expectations on profit and revenue. [20]
2026 guidance: slower revenue, still healthy profit growth
With inflation cooling, Compass is guiding to less frothy top‑line growth but still impressive profit progress for FY26: [21]
- About 7% organic revenue growth.
- Around 10% growth in underlying operating profit at constant currency.
- Roughly 2 percentage points of profit growth from M&A, including Vermaat.
- Continued margin expansion.
Management also flags:
- Underlying finance costs of roughly $350 million in FY26, including the impact of Vermaat. [22]
- A temporary rise in leverage above the 1.0–1.5x net debt/EBITDA target range as M&A closes, with a peak around the half‑year. [23]
Longer term, the group reiterates its familiar algorithm: mid‑to‑high single‑digit organic revenue growth, steady margin progress, and profit growing faster than sales. [24]
Strategy and growth drivers: outsourcing, AI and Vermaat
The 2025 story isn’t just about beating consensus; it’s about where the growth is coming from.
Outsourcing tailwind in a big, under‑penetrated market
Compass estimates its total addressable market at roughly $360 billion, with less than 15% global market share today. [25]
The structural forces helping Compass:
- Many employers, hospitals, schools and public‑sector bodies still run catering in‑house.
- Tight labour markets and growing compliance burdens make outsourcing more attractive.
- Compass’s 4.5% net new business growth on a revenue base the size of a small country’s GDP suggests this shift is very much alive. [26]
AI and the data‑centre boom
A recent Financial Times article describes how Compass is leaning into the AI infrastructure boom. Tech giants are spending over $300 billion on data centres this year, and those data centres — plus the construction sites that precede them — all need to feed large workforces. [27]
Compass is:
- Catering on some data‑centre construction sites already.
- Targeting longer‑term contracts once facilities are operational.
- Benefiting from tech firms’ use of high‑quality catering to lure employees back to the office and improve retention. [28]
That means “AI” shows up in Compass’s world less as a job‑destroying robot, and more as a source of new canteens.
Vermaat: Compass’s biggest deal ever
In July, Compass announced its largest acquisition to date: the purchase of Vermaat Groep, a premium European food‑services operator, for about €1.5 billion ($1.75–1.8 billion) including debt. [29]
According to Compass and Reuters:
- Vermaat is expected to generate around €700 million of sales in 2025 with double‑digit operating margins. [30]
- It strengthens Compass’s footprint in high‑end locations such as museums, galleries and prestige venues in the Netherlands, France and Germany. [31]
- The deal builds on a multi‑year push into premium and niche formats, complementing previous acquisitions in Europe and North America. [32]
In FY25, Compass spent about $1.3 billion on M&A and $1.5 billion on capex, while still growing free cash flow and dividends — a sign the balance sheet remains comfortable even as the company leans into bolt‑on deals and platform acquisitions. [33]
Valuation and consensus forecasts: how cheap is “cheap enough”?
Where the shares trade versus history
Various data providers point to a quality‑stock premium that has shrunk, but not disappeared:
- MarketBeat’s snapshot around the time of the analyst upgrades shows a P/E ratio of about 27–28x, a P/E/G around 1.4, and a beta near 0.8, with net debt to equity around 86%. [34]
- Ts2’s analysis around 28 November pegs the trailing P/E at about 28–29x and a price‑to‑sales ratio close to 1.2x, with returns on equity above 27% and returns on capital above 20% based on third‑party estimates. TechStock²
The dividend yield, meanwhile, sits around 2%, after the board raised the FY25 payout by just over 10%. [35]
In simple terms: Compass is not a bargain‑basement stock, but it’s trading at a lower multiple than earlier in the cycle, even as profits and cash flows keep marching higher.
City forecasts on the London line
On the London listing (CPG):
- MarketBeat’s forecast page shows 7 analysts, all rating the stock “Buy”, with an average target of 2,979p (range 2,775–3,100p), implying about 26% upside from a current price in the mid‑2,300s. [36]
- TipRanks, aggregating 11 analysts over the last three months, pegs the average target at 2,999p (high 3,155p, low 2,775p), again implying about 26.5% upside from a last price of 2,370p. [37]
- A late‑November MarketBeat news piece summarised the stance as “Moderate Buy” from six analysts (four buys, two holds) with an average target of 2,870p, plus highlighted buy‑rated targets of 3,000p from Berenberg and Jefferies, and 2,900p from Deutsche Bank. [38]
So depending on whose database you prefer, the consensus sits somewhere between “comfortable Buy” and “Moderate Buy,” with double‑digit percentage upside baked into most models.
US ADRs: bullish targets too
Nasdaq‑hosted summaries of Fintel data show similarly upbeat views for the US OTC lines: [39]
- For CMPGY (the sponsored ADR), the average one‑year target is about $38.9, roughly 36% above a recent close near $28.6.
- For CMPGF (another OTC line), the average target is around $39.6, implying nearly 40% upside from a similar starting point.
Those ADR targets are essentially the dollar‑translated echoes of the London‑listed forecasts.
Fresh upgrades: RBC, Citi and friends
Recent broker moves have added fuel to the bullish consensus:
- RBC Capital Markets upgraded Compass from “sector perform” to “outperform” on 1 December, lifting its price target to 2,775p and citing market‑share opportunities and structural tailwinds in outsourcing. [40]
- Citigroup upgraded the shares from “neutral” to *“buy” on 27 November, raising its target from 2,750p to 3,000p. TechStock²+2TechStock²+2
- Other brokers including UBS, Kepler and Deutsche Bank are also sitting on buy‑rated targets in the high‑2,000s to low‑3,000s. [41]
Add Berenberg’s latest £31 call into that mix, and the sell‑side picture is clear: analysts see Compass as a high‑quality compounder that has de‑rated, not a busted growth story. [42]
Balance sheet and cash: room to keep investing
Compass’s model is capital‑light but working‑capital hungry. The numbers behind that:
- Quick ratio around 0.86 and current ratio around 0.74 — normal for a catering group that gets paid frequently but carries labour and inventory costs upfront. [43]
- Net debt has risen to roughly $6.4 billion, largely due to M&A and dividends, putting net debt/underlying EBITDA at about 1.4x, the upper end of management’s 1.0–1.5x target range — but still comfortably investment‑grade. TechStock²+1
Crucially, Compass generated almost $2 billion of free cash flow in FY25 while spending heavily on capex and acquisitions, and still managed to grow its dividend. That combination — high cash conversion plus disciplined leverage — is a big reason why investors are willing to pay a premium multiple at all. [44]
Technical backdrop: solid company, bruised chart
You don’t need an actual chart to sum up the chart:
- Recent analysis notes Compass trading below both its 50‑day and 200‑day moving averages, with automated technical ratings skewing “sell” on daily and weekly timeframes. TechStock²+1
- Around the end of November the shares were described as sitting just above their 52‑week low and about 17% under their peak, despite the strong FY25 print and upbeat FY26 guidance. TechStock²+1
That combination — fundamentals pointing up, price pointing down — is exactly what makes Compass polarising right now. Bulls call it “an attractive entry point into a high‑quality compounder”; sceptics worry the multiple is still too rich if growth or margins disappoint. TechStock²+2MarketBeat+2
Risks on investors’ radar
No stock gets a one‑way narrative, and Compass is no exception. Among the main watchpoints:
- Workplace trends and AI
- Hybrid work and AI‑driven automation could shrink white‑collar headcount or reduce time spent in the office, putting pressure on some corporate catering volumes. TechStock²+1
- The counterbalance is the AI and data‑centre boom itself, plus employers using food quality to entice staff back on‑site. Net impact: uncertain and likely to play out slowly.
- GLP‑1 weight‑loss drugs
- Some analysts worry that widespread adoption of GLP‑1 therapies could reduce calorie consumption and eventually food volumes.
- RBC and others tend to see this as a manageable risk given Compass’s diversified client base and ability to adjust menus and pricing. TechStock²+1
- Labour costs and inflation aftershocks
- Wage inflation and staff shortages remain structural headwinds in hospitality and support services.
- So far, Compass has protected and even expanded margins, but contract renewals and pricing discipline will be critical if inflation persists in pockets. [45]
- M&A and leverage
- Big deals like Vermaat can create value, but they also bring integration risk and temporarily higher leverage.
- With net debt near the top of the target range and more bolt‑ons likely, investors will watch return on invested capital and deleveraging closely. [46]
- FX and interest rates
- Compass earns a large chunk of profits in North America but reports in US dollars and lists in London, exposing shareholders to currency swings.
- Higher rates lift the cost of servicing its sizeable but manageable debt pile. [47]
- Insider transactions and governance optics
- The recent CEO share sale and broader pattern of insiders selling more than they buy over the last year will naturally make some investors cautious, even if much of the activity is tied to tax settlements on vested awards. [48]
Bottom line: a high‑quality compounding story under short‑term pressure
As of 8 December 2025, the Compass Group PLC stock story looks something like this:
- Business quality: Still very high — global scale, sticky long‑term contracts, strong free cash flow and a clear structural tailwind from outsourcing and data‑centre growth. [49]
- Near‑term growth: Management is guiding to mid‑single‑digit revenue growth and ~10% profit growth for FY26, while Berenberg and others think Compass can do a bit better. [50]
- Valuation: Not cheap, but meaningfully lower than earlier in the cycle; most brokers see 20–30% upside from here over 12 months, assuming the earnings trajectory holds. [51]
- Sentiment: Analyst opinion is firmly positive, yet the share price is still digesting macro worries, M&A leverage, and insider selling headlines. [52]
For long‑term, fundamentals‑driven investors, Compass today is the classic puzzle: a dominant, cash‑generative leader with visible growth drivers, available at a lower multiple than before — but still with enough risk and complexity that the market isn’t prepared to throw confetti just yet.
References
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