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This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.

Buy – Compass Group - 25 May 2018

Trade Parameters

  • Opening Price: 1609.5p
  • Stop Loss: 1559.5p (50p/3.1% below)
  • Profit Limit: 1766.3p (156.8p/9.7% above)
  • Reward vs Risk: 3.1x
  • CFD Margin: 5%

Technical Observations – For

  • Bullish breakout on back of May uptrend
  • Bullish breakout by Point & Figure Chart
  • RSI and Stochastics moving into upper half = Bullish
  • Momentum rising

Technical Observations – Against

  • No bullish cross by Directional Indicators
  • Stochastics close to moving into overbought
  • ADX Trend Strength still low
  • Lack of volume

Analyst Comments

Share price breakout to extend May uptrend. Potential for a rally back to rising highs extending back to summer of 2005 (highs last seen in July 2017). Recently upgraded to Outperform by Bernstein, citing potentially stronger H2.

Consensus is Bullish (only 10% of brokers say Sell) and 45% of brokers suggest upside from current levels. Consensus target implies upside of 5.8%, but share price momentum could generate rating and targets upgrades among the 45% of brokers who are neutral. Average May broker target price of 1689p is moving the current price closer to the 1714p 12-month target, as well as our profit limit of 1766p.

Next Event: Trading Update, 26 Jul

Latest Broker 12-Month Consensus:  45% Buy, 45% Hold, 10% Sell (full breakdown on request)

Source: DowJones Newswires, Reuters News, Bloomberg  or Company Press releases

12-month (daily) - Price, Volume

12-month (daily) - MACD, Stochastics, Trend Strength, RSI, Momentum

Share 1wk 1m 3m 6m 1yr 2yr 3yr 4yr 5yr
Perf % -18.3 -13.6 -14.2 -7.3 -19.7 25.5 93.8 117.9 247.4
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