DO & CO (WBAG:DOC) Stock Can Record Margins Offset Concentration Risk?

DO & CO went into this earnings day with a strong recent run, the stock up about 11.6% over the past three months and closing at €207.5 just before the release. The company now has to justify that optimism. Based on the reported figures, Q1 delivered the strongest first quarter in its history, with revenue of €642m and net income of €31.2m. Margins also inched higher, with the EBIT margin at 8.8%. For a premium catering and hospitality stock that trades on quality and execution, this is the headline investors will focus on.

Is DO & CO a genuine bargain at this price or just wearing a cheap-looking multiple that earnings cannot back up? Compare the current share price against fair value in the valuation analysis for DO & CO.

Q1 2027 Earnings Summary

• Revenue (Q1 2027 vs. Q1 2026): €642.0m vs. €611.68m (up about 5%)
• Net Income (Q1 2027 vs. Q1 2026): €31.2m vs. €26.79m (up about 16%)
• Basic EPS (Q1 2027 vs. Q1 2026): not disclosed; €2.4391 in Q1 2026 (Q1 2027 is higher in line with net income growth)
• EBIT Margin (Q1 2027 vs. Q1 2026): 8.8% vs. 8.6% (slight margin improvement)

Tired of scrolling through earnings tables and rows of figures to understand DO & CO? See the full financial picture, including a clear view of the company's valuation at a glance, in the interactive company report for DO & CO.

DO & CO bull story passes key early tests

Bulls argue that DO & CO is building a premium, scalable platform that converts contract wins and big events into higher quality earnings. Q1 backs up several of those milestones. Airline Catering revenue grew 10% at constant currency with about 300,000 meals per day and peaks at 350,000, which supports the idea that premium long haul exposure is filling the new capacity. Event Catering EBIT grew 20% on 11% revenue growth, helped by the FIFA World Cup and Formula 1, which points to real operating leverage rather than just more volume. Group EBIT margin edged up to 8.8% while free cash flow doubled to €46.9m and the balance sheet moved into a small net cash position. Management also reaffirmed full year revenue and margin guidance, which keeps the path toward the 9% to 10% EBIT target intact for now.

Bear case on concentration and execution still relevant

The sceptical view is that DO & CO carries concentration and execution risk that could quickly dent margins. Q1 gives some support to that caution. Management quantified about €40m of lost revenue from Middle East disruption, with hits in both Airline Catering and Event Catering. That shows how sensitive earnings are to route changes and event calendars. Two canceled Middle East F1 races also forced reliance on the World Cup to keep Event Catering growing. Customer and regional concentration therefore remains a live issue, even if Q1 managed to offset it. Execution risk around capacity is also visible. The new Istanbul mega kitchen is being built for around 500,000 meals per day while current volumes sit near 300,000. Guidance assumes that extra load comes through. Any delay in airline ramp up would leave the group carrying higher fixed costs against that larger asset base.

Compare whether DO & CO's record Q1 margins and cash generation are convincing analysts, or if concentration risks are keeping expectations in check. See the consensus price target analysis for DO & CO

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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