Citi cuts Sodexo on 'long turnaround', flips preference to Compass with 'buy'

Elior SA

27/11/2025 09:48

** Citigroup downgrades Sodexo EXHO.PA to "neutral" from "buy", saying it will likely take a long time for the French food services firm to demonstrate its turnaround to investors

** "Investors will await definitive evidence of a recovery in our view," the broker says, noting the stock saw no market reaction from CEO change and catalysts for rerating are not imminent

** Citi prefers British rival Compass CPG.L, which it upgrades to "buy" from "neutral", citing its attractive valuation and sustainable growth

** The broker expects recent European M&A to lift Compass' international margins and sees a return to share buybacks in November 2026 as a further catalyst for the stock

** It maintains Aramark ARMK.N and Elior ELIOR.PA at "buy", viewing Aramark as undervalued and noting Elior's dividend resumption provides a price floor

** Of 18 analysts that cover Sodexo, four rate it "strong buy" or "buy",​ 13 "hold" and one "sell" - LSEG data

** Fourteen out of 21 analysts rate Compass "strong buy" or "buy", with ​five at "hold" and two​ at "strong sell" or "sell" - LSEG data

(Reporting by Dimitri Rhodes)

((Dimitri.Rhodes@thomsonreuters.com;))