The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.
Ashtead Group’s share price hit a record high last month and traders hold hopes for the results. There is no stopping the share price growth which has gone up twelvefold in five years, and with record profits expected to be announced dealers are still bullish. In the first six months of the year, the firm revealed a 33% jump in profits and dividend, and the full-year guidance was raised by the same.
The company hires out machinery that is used in the construction industry, and the robust property market in the US and the UK has seen demand ramp up for Ashtead’s business. The group earns over 80% of its revenue from its operation in the US, and the strong dollar is providing a bonus to the London-listed company. The construction sectors in both the UK and the US are secure, with the outlook in both nations positive and Ashtead’s prospects are only getting better.
The market is expecting full-year revenues of £2.01 billion and adjusted net income of £311 million when Ashtead reveals its numbers. These forecasts equate to a 23% increase in revenue a 33% rise in adjusted net income. The company will also announce its second-half numbers on the same date; dealers are expecting revenue of £1 billion, and adjusted net income of £136 million. This compares with the first-half revenue and adjusted net profit of £987 million and £169 million respectively.
Equity analyst are very bullish on Ashtead. Out of the 17 recommendations, 14 are buys, and three are holds. The average target price is £13.12, and this is 14% above the current price.
The share price has been in an aggressive upward trend since 2012, and an all-time high of £12.31 is the initial target — a move through it will bring £13 into play. The stock has been trading lower recently but £11 will provide support, and if that mark is punctured £10 will be the next level of support.