FTSE 100-listed Compass Group PLC (GB:CPG) shares soared by almost 5% as of writing, after the company reported strong performance for the third quarter of FY24 and raised its full-year guidance. For the full year, Compass Group now expects its underlying operating profit growth to surpass 15% on a constant-currency basis and organic revenue growth to cross 10%. The company had earlier projected profit growth of around 15% and revenue growth of about 10%.
Compass Group is a global food service and catering company operating in 45 countries. It serves diverse sectors such as education, healthcare, sports, and defence.
Highlights from Compass Group’s Q3 Update
According to the update, Compass Group’s organic revenue grew by 10.3% year-over-year in the third quarter of Fiscal 2024, surpassing analysts’ consensus estimate of 9.5%.
The company highlighted solid growth across all regions, with Europe recording the highest growth at 12%, followed by North America at 9.9% and the Rest of World segment at 8.5%.
Compass Group is actively investing in its portfolio to enhance its operational flexibility. Year-to-date, the company has invested $836 million in mergers and acquisitions, including the acquisition of CH&CO and the divestment of its Brazilian operations.
The company further stated that it has completed share buybacks worth $300 million out of its total programme of $500 million, which was announced in November 2023. The company will complete the remaining buybacks by the end of 2024.
Is Compass Stock a Buy?
Overall, analysts have a bullish view of CPG stock, as evidenced by its Strong Buy rating on TipRanks. This includes four Buys and one Hold recommendation. The average Compass share price target is 2,387.50p, which is 4.2% higher than the current trading level.
