Compass Group: Contact: Still great opportunities in NA and recurring cash returns expected
BUY vs. NEUTRAL, Fair Value 1010p vs. 900p (+11%)
Despite a challenging comparison basis especially on the EBIT margin, the group still has room for improvement. Currently mainly linked to NA, where the group benefits from its size and density of its client portfolio, we estimate that recent development, especially in Education, could sustain the group’s results. With strong free cash flow generation and only infill acquisitions expected, cash returns are likely to continue. All in all, with strong fundamentals and good growth prospects, we upgrade our recommendation to buy with a Fair Value of 1010p.
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