Compass share price climbs to record high on share buyback report

on Nov 25, 2013
Updated: Oct 21, 2019
Listen, Monday, November 25: Shares in Compass Group (LON:CPG) rose to an all-time high this morning following a report that the world’s biggest contract catering firm is set to unveil a new share buyback plan. According to the Sunday Times, the company will return up to £500 million to investors. The announcement is expected on Wednesday, together with Compass’ annual results. It will be the third year in a row that the company has bought back shares following strong results. A year ago it announced a £400 million share buy-back programme for the 2013 calendar year, after £500 million of repurchases in 2012. The company declined to comment on the report.

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Compass’ share price hit a record high of 922p this morning. The stock traded at 919p as of 8:31 UTC, up one percent from Friday’s close.
Trade these shares now through Hargreaves Lansdown from £5.95 per deal.
**Earnings seen higher**
Compass, which provides contract food and support services to clients in Europe, North America, Japan and a number of fast growing emerging markets, is expected to report earnings per share of £47.05 for fiscal 2012/13, up from £45.64 last year, according to the mean estimate of 27 analysts polled by Reuters. The company’s full-year sales are projected to have grown by about one percent to £17.594 billion.

Compass has been hit by challenging conditions in Europe and Japan, and particularly in Southern Europe, but has managed to offset this weakness by strengthening its footprint in fast growing emerging markets, such as Brazil. Its dominant region is the US, accounting for almost half of its revenue. Twitter, eBay, and the Wimbledon stadium are among its most prominent clients. According to the Sunday Times, Compass may announce new contracts with social media company Linkedin and the Portland Trail Blazers basketball team.

**Analysts on Compass**
On Friday, Panmure Gordon reiterated its ‘hold’ recommendation on Compass’ shares with a price target of 820p and RBC Capital maintained an ‘outperform’ rating on the stock with a price target of 930p. Two days previously, Credit Suisse also maintained an ‘outperform’ rating with a price target of 985p.

The stock currently has a consensus rating of ‘hold’ and an average target price of 919.33p, according to a survey of 25 analysts published by Analyst Ratings Network.
**As of 8:15 UTC buy Compass shares at 918.50p.**
**As of 8:15 UTC sell Compass shares at 917.50p.**
Trade stocks with Hargreaves Lansdown from £5.95 per deal.
Prices can go up and down meaning you can get back less than you invest. This is not advice. Dealing services provided by Hargreaves Lansdown.


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