JP Morgan stays at 'underweight' on Compass due to changing industry landscape

Relative to its peers, the catering services group's decision to proceed with a share placing was a "positive" and was expected to result in a stronger balance sheet, they said.

But the speed and size of changes in the industry, including increased work-from-home, longer shifts, increased labour, together with the increased costs associated with new social and health standards were a concern.

The broker cut its estimates for earnings per share by roughly 15%, although roughly eleven percentage points of that change was the result of the placing, leaving them about 14% below the analyst consensus for financial year 2021 and onwards.

JP Morgan also reduced its forecasts for the company's sales in financial years 2021 and 2022 by 11% and 7%, respectively, in comparison to the same period one year ago, with margins now seen 90 and 60 basis points narrower.

The target price meanwhile was cut by about 10% to 1,050.0p.