LONDON - Compass Group (LON:CPG), a leading foodservice company, is expected to reveal its fiscal results on Monday, forecasting significant growth in both revenue and pretax profits. The company projects a jump in revenue to £31.2 billion, up from £25.5 billion the previous year, while pretax profits are anticipated to climb to £1.84 billion from £1.47 billion.
The firm is also predicting an increase in adjusted earnings before interest and taxes (EBIT) to £2.12 billion, with margins expected to improve to 6.8%. This outlook is supported by analysts from Stifel, who predict a strong upcoming fiscal period for Compass Group. They estimate an adjusted earnings per share (EPS) growth of approximately 13%, driven by solid organic revenue increases and diminishing inflationary pressures. These factors are likely to enhance operating leverage and contribute to gains from new business acquisitions.
The positive forecast comes amid a backdrop of receding inflationary trends which have previously impacted businesses globally. The expected financial performance indicates that Compass Group has effectively navigated these challenges, positioning itself for robust organic growth and improved profitability.
Investors and market watchers will be keenly awaiting Monday's detailed financial disclosure to gauge the company's actual performance against these projections and understand the strategies that have led to the anticipated success.
InvestingPro Insights
Compass Group's (CPG) impressive financial projections are further supported by real-time data from InvestingPro. The company's market cap stands at a robust 4040M USD, and it has seen a revenue growth of 2.91% over the last twelve months as of Q3 2023. Additionally, CPG's gross profit margin for the same period was recorded at a healthy 70.91%.
InvestingPro Tips also highlight the company's strong financial standing. Notably, CPG has a perfect Piotroski Score of 9, indicating a strong financial health. The company's high earnings quality is evident, with free cash flow consistently exceeding net income. Moreover, CPG has consistently increased its earnings per share, a trend that analysts expect to continue into the current year.
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