Ashtead share price: what to expect from its full-year results

The British industrial equipment rental company is expected to beat its earnings forecasts when it unveils its full-year results on Tuesday, though investors remain concerned about a slowdown in its US business.

Ashstead Source: Bloomberg

Over the last two months, shares in Ashtead have lost more than 10% of their value and have remained subdued ahead of its full-year results on Tuesday as investors grow increasingly worried about a slowdown in its key US market.

As it stands, the British industrial equipment hire company originates around 85% of its sales and 90% of its profits from its US-based Sunbelt business, with investors worried that the unit has suffered at the hands of severe rainfall which has delayed many contracts with clients in the construction industry

However, one of its closest peers, US-based United Rentals, recorded a strong performance in its Q1 trading update, which bodes well for Ashtead ahead of its full-year results on Tuesday.

Ashtead rental revenue surges

Despite heavy rain potentially dampening its full-year results, Ashtead’s rental revenues have surged by as much as 18% in the last nine months of trading, buoyed by a stronger US economy.

The company remains on track to deliver a strong set of results on Tuesday, with the business expecting meet expectations. However, there is still a very real chance that it may succumb to the macroeconomic pressures, with the ongoing US-China trade war weighing down on business confidence.

Ashtead share price: technical analysis

Since late December, Ashtead shares have been in a rising channel formation, as a series of higher highs and higher lows are created. From the April peak at £22, the price then retreated to around £18.50, before a bounce materialised.

Gains so far have stalled at £20, with a confluence of moving averages also providing a notable resistance zone. Above £20, and then above the mid-May high of £20.50, the price heads back towards £22. A close below £18.20 breaks below the current rising channel and would reinforce a more bearish view.

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