(CercleFinance.com) – Liberum is maintaining its Hold recommendation on Compass stock but is revising its price target upwards to 2010p (from 1990p).
‘Compass ended the year on a high note, with preliminary results at the upper end of the consensus’, begins the analyst.
‘Organic growth of 37.5% for FY22 was driven by the recovery in volumes and price increases, as well as a higher rate of net new business (+7.5% year-on-year)’ , continues Liberum.
While the stock’s performance was impressive, up 23% over the reporting period, the operating margin recovery was slower, ‘ to 6.2% for FY22, and forecasts for the next year are ‘over 6.5%’ from pre-Covid levels of 7.4%, the analyst says.
‘We are revising the operating profit forecast by 5% and raising our price target to 2010p’ continues Liberum. And to specify: ‘Our forecasts take into account an organic growth of the turnover for the financial year 23E and margins of 6.9%.’
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