Compass Group: Plates Up Another Strong Quarter

Narrow-moat Compass has put in a solid shift, with organic revenue growth for the three quarters of the year to date north of 21%. While growth slowed in the third quarter to 15%, this was expected, against tougher 2022 comparables. Having upgraded full-year guidance last quarter, there were no changes this time around, but with expectations of organic revenue growth of about 18%, combined with operating margin improvement to 6.7%-6.8%, this represents a solid improvement, albeit still someway off the prepandemic levels of profitability. With shares hovering right around our GBX 2,250 fair value estimate, however, we see limited value at this time.