| Valuation method | Value, € | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 45.90 | 81 |
| Intrinsic value (DCF) | 198.91 | 683 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 39.10 | 54 |
Compass Group PLC (XGR2.DE) is a global leader in food service and support services, headquartered in Chertsey, Surrey, UK. Operating across North America, Europe, and the Rest of the World, the company serves diverse sectors including business and industry, healthcare, education, defense, and sports and leisure. With a workforce of nearly 600,000 employees, Compass Group delivers comprehensive solutions ranging from meal services to hospitality, cleaning, maintenance, and security. The company's broad service portfolio and global footprint make it a key player in the consumer cyclical sector, particularly within the restaurant and food service industry. Compass Group's ability to cater to institutional clients in varied environments—from corporate offices to remote offshore locations—positions it as a resilient and adaptable provider in a competitive market. Its diversified revenue streams and strong operational capabilities underscore its relevance in the evolving food service landscape.
Compass Group PLC presents a compelling investment case with its diversified global operations and strong market position in the food service industry. The company's revenue of €42 billion and net income of €1.4 billion reflect its scale and profitability. With a beta of 0.584, it exhibits lower volatility compared to the broader market, appealing to risk-averse investors. The company's robust operating cash flow of €3.1 billion supports its dividend payout of €0.58 per share, indicating financial stability. However, investors should consider the cyclical nature of the consumer discretionary sector and potential margin pressures from labor costs and supply chain disruptions. The company's significant debt of €5.9 billion, though manageable given its cash reserves, warrants monitoring. Overall, Compass Group's market leadership and operational efficiency make it an attractive long-term holding, albeit with sector-specific risks.
Compass Group PLC holds a competitive advantage through its extensive global footprint and diversified service offerings, which span multiple sectors and geographies. Its ability to provide integrated food and support services under one umbrella differentiates it from smaller, niche competitors. The company's scale allows for cost efficiencies and strong supplier relationships, enhancing margins. In North America and Europe, Compass benefits from long-term contracts with institutional clients, ensuring steady revenue streams. However, the company faces intense competition from other global players like Sodexo and Aramark, which also boast broad service portfolios and strong brand recognition. Compass's focus on innovation, such as digital ordering and sustainable food sourcing, helps it stay ahead in a rapidly evolving industry. Its healthcare and education segments are particularly resilient, providing stability during economic downturns. Nevertheless, regional competitors in emerging markets may challenge its growth, and labor-intensive operations expose it to wage inflation risks. Overall, Compass's competitive positioning is strong, but maintaining leadership requires continuous investment in technology and customer service.