Compass Group (LON:CPG), a food and support services firm, has seen its share price slide around 2% this year, but the company was given a boost on Thursday after Deutsche Bank upgraded the stock.
The bank lifted its rating for Compass Group to a Buy rating from Hold, setting a price target of 2,900p, a bump up from their previous 2,700p target.
The newly bullish outlook is said to be underpinned by the bank’s view of Compass’s defensiveness in the current economic climate, naming it their top pick in the leisure sector.
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Compass Group shares rallied around 2.8% in Thursday’s session, while they have added 0.2% so far on Friday.
This positive sentiment echoes a similar upgrade from Kepler Cheuvreux in July, who also moved Compass Group to a Buy rating, increasing their price target to 2,950p from 2,800p following what they considered a better-than-expected Q3 report.
The upgrades stand in contrast to a more pessimistic view from Exane BNP Paribas, which in March downgraded Compass Group to Underperform from Outperform, lowering the price target from 3,000p to 2,500p, citing weak U.S. retention survey data and a perceived lack of upside to estimates.
Meanwhile, in February, Erste Group initiated coverage of Compass Group with a Buy rating after a period of being Under Review. Their analysis projects that Compass will achieve sales growth in the high single-digit percentage range for 2025, indicating confidence in the company’s future performance.
Elsewhere, Citi resumed coverage with a Neutral rating and a 2,900 GBp price target. Citi highlighted the potential for market leaders in the leisure sector to enhance their competitive advantage through technology deployment and favorable pricing dynamics.
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