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Investors should tuck into contract caterer Compass, according to Japanese broker Nomura, as the group's revenue volume appears to be running ahead of expectations.

'For Q1 2010 [first quarter of 2010], Compass reported an organic revenue decline of 1.7%, 1.9 percentage points better than our forecast of -3.6%. The forecast beat was on cyclical volume (57% of group) where we were forecasting -12.3% which was equivalent to stabilisation at the Q4 2009 [fourth quarter 2009] run rate on a cumulative basis versus 2008,' said Nomura analyst Simon Larkin.

The broker has upped its earnings before interest and tax forecast for the current fiscal year to £990m from £935m, and has retained its 'buy' rating and 615p price target.

Daniel Stewart remains 'highly bullish' about the prospects for 888 Holdings after the online gaming firm issued an upbeat fourth quarter trading statement.

888's fourth quarter revenue of $67.9m was well ahead of the broker's $64.3m forecast, driven by the group's core casino business to consumer (B2C) offering, where revenue of $33.4m in the fourth quarter was much better than the $30.8m the broker had pencilled in for the division.

'Overall, revenue for FY09 [full year 2009] came in at $246.7m, ahead of our $243.1m estimate and marginally above consensus. The group has indicated that EBITDA [earnings before interest, tax, depreciation and amortisation] for FY09 should be in line with consensus (our estimate is $45.0m, a touch above consensus at $44.4m).,' investment analyst James Hollins notes.

The broker has retained its 145p price target and 'buy' recommendation on the back of the revenue outperformance and the possibility of more earnings accretive acquisitions to come.

Public sector outsourcing firm May Gurney has announced its second major water-related contract win of 2010 and broker Charles Stanley is expecting more to come as the AMP5 cycle moves into full swing.

'In our view, there is strong potential for May Gurney to feature in further contract announcements in the water sector, particularly as the AMP5 cycle gets underway and runs through to 2014. We also believe that the bid pipeline remains strong within the group's other sectors, notably the environmental and highways sectors,' Charles Stanley analyst Matthew Earl said.

The broker has a 'buy' recommendation on the shares and a price target of 305p. 'The shares have tailed off over the last few weeks having reached recent highs in early January, which we believe to be unjustified against the attractive features the business provides,' Earl said, adding that a 'strong balance sheet, high cash generation, a net cash position for FY2010 forecast to be £24.3m, and strong management, all, in our view, add to the attractions' of the shares.