MARKET TALK: Citigroup Initiates Compass At Buy

14th Jul 2010 07:18

0618 GMT [Dow Jones] Citigroup initiates Compass Group (CPG.LN) at buy with 630p target. Says the shares are up by 15% in 2010 on strong trading momentum but at the same time are at about a 7%-8% discount to its historical P/E average. Says Compass' cost-saving program has delivered over 200bps of margin expansion over three years to 6.5% in FY '09. Notes that another 200bps of margin improvement to 8.5% is flagged over the longer term and early execution would lead to tangible EPS upgrades. Shares closed Tuesday at 553p. ([email protected]) Contact us in London. +44-20-7842-9464 [email protected] (END) Dow Jones Newswires July 14, 2010 02:18 ET (06:18 GMT)