Broker snap: Margin growth the key at Compass

24th Jul 2009 10:57

Swiss bank UBS is mystified by the adverse reaction to yesterday's trading statement from catering group Compass, and reckons fears over revenue growth are misplaced.Echoing a view expressed yesterday by broker Charles Stanley, UBS believes that margin improvement will enable Compass to hit its profit targets. ""Given the progression of the margin story, we believe share price reaction on July 23 (down 7%) is over done, we are not changing forecasts and re-iterate our Outperform rating," UBS said.The bank has a price target of 435p for the stock.