Berenberg Keeps Compass Group's Buy Rating, Price Target on Growth Prospects

08:06 AM EDT, 07/23/2026 (MT Newswires) -- Berenberg maintained Compass Group's (CPG.L) buy rating and price target at $42, citing the company's organic growth prospects and declining leverage. "Compass's current valuation is unreflective of its growth algorithm and the quality of its earnings. Organic growth remains structurally higher than history; margins are expanding, supporting double-digit profit growth; and leverage is falling following the Vermaat transaction, supporting further shareholder returns," the research firm said in a Thursday note following the company's fiscal third-quarter update. For the three months ended June 30, the food services company reported organic revenue growth of 7.1%, slightly ahead of consensus estimates, driven by its "strongest performing" business and industry segment. "While Compass's Q3 results are relatively short, we would highlight three key takeaways that, in our view, signal underlying strength in the business. Firstly, new business wins on an LTM basis reached $4.3bn, up by 16% yoy, showing a strong acceleration from recent periods. 50% of new wins were from first-time outsourcing, demonstrating ongoing outsourcing penetration trends. Furthermore, Compass estimates the $4.3bn signings number is 2-3x larger than the company's closest international competitors combined, showing the importance of scale. Finally, Compass confirmed on the conference call that it expects net new business to accelerate again in Q4 versus Q3," analysts said. Berenberg made "no material changes" to its underlying estimates, maintaining its organic growth projection at 7.2% and its operating profit growth forecast at 11.2% at constant currency.