Before it got dragged into the market-wide malaise that spoiled the end of the year, the industrial equipment rental company was having a cracking 2018. By the start of October it had climbed to an all-time high of £24.47, a 24% increase from where it started in January. However, it fell off a cliff from that point onwards, eventually ending December at £16.30.
The stock has rebounded hard in 2019, though given the size of its end of 2018 slump that only just about takes it back to where it began last year. Ashtead Group (LON:AHT) PLC now sits at a current trading price of £19.78 (Spreadex, 28/02/2019).
While it might have come during a tough December, there was a lot to recommend in the month’s half year results. Revenue rose 19% to £2.25 billion, with a 25% surge in pre-tax profit to £610 million, and a stonking 42% jump in underlying earnings to 98.8p per share. The firm ended the update by stating that it now expects full year results to be ‘ahead’ of its prior expectations, and that the Board ‘continues to look to the medium term with confidence’.
If Ashtead is to continue its 2019 recovery, then Tuesday’s Q3 results need to maintain that double-digit growth posted in the first and second quarters. The performance of its US division, which makes up something like 85% of its total revenue, will be key, with the company susceptible to any stateside economic slowdown.
Ashtead Group PLC(LON:AHT) has a consensus rating of ‘Buy’ alongside an average target price of £22.83.
Disclaimer: Spreadex provides an execution only service and the comments above do not constitute (or should not be construed as constituting) investment advice or recommendations, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any person placing trades based on their interpretations of the above comments does so entirely at their own risk. Spreadex Ltd is a financial and sports spread betting and sports fixed odds betting firm, which specialises in the personal service and credit area. Founded in 1999, Spreadex is recognised as one of the longest established spread betting firms in the industry with a strong reputation for its high level of customer service and account management.
In relation to spread betting, Spreadex Ltd is authorised and regulated by the Financial Conduct Authority. Spread betting carries a high level of risk to your capital and can result in losses larger than your initial stake/deposit. It may not be suitable for everyone, so please ensure you fully understand the risks involved.