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

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