Compass share price falls as Deutsche Bank downgrades its rating

(CercleFinance.com) - Compass shares fell sharply on the London Stock Exchange on Friday in the wake of a downgrade by Deutsche Bank, which no longer has a buy rating on the stock.


In a note devoted to the major European players in foodservices, including Sodexo and Elior, the research firm explains that it has changed its recommendation on Compass to 'hold', with the target price maintained at 2,500 pence.

While highlighting the resilience of the sector, which is expected to grow by between 5% and 10% this year, the analyst believes that this resilience cannot be achieved 'at any price'.

In his view, however, the cash flow generated by the sector's major groups should enable them to accelerate their M&A operations and/or returns to shareholders.

With regard to Compass, Deutsche Bank estimates that the British group has "firepower" of between £500 million and £1 billion to remunerate its shareholders.

At around 3:30 p.m. (London time), Compass shares were down by around 1.6%, compared with a 0.8% decline for the FTSE 100 index.

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