Limited upside at Compass despite upgrade, says Numis

5th Feb 2015 10:20

Compass delivered a good start to its new financial year and Numis Securities has upgraded its estimates for the catering company, though the broker still maintained a 'hold' recommendation for investors.Numis lifted its target price for the stock from 975p to 1,150p, but said the share price was "up with events".This was in spite of the broker admitting that Compass' first-quarter performance was well ahead of its own expectations.Organic revenues grew by 5.7% at constant currency in three months ended 31 December 2014, ahead of the 4% growth rate that Numis had pencilled in and the 4.1% increase reported for the whole of last year."Organic revenue growth has been driven by a continued strong performance in North America with Europe and Japan returning to growth earlier than we had expected."Fast growing and emerging [markets], where we were concerned about the downside risk from offshore and remote, reported double-digit first-quarter growth in emerging markets offsetting pressures elsewhere."The stock was up 1.3% at 11:40 on Thursday.