5 March 2024
If you are covering Ashtead’s latest results, please see the following comment from Jarek Pominkiewicz, equity research analyst at Quilter Cheviot:
“Ashtead’s share price has dropped more than 6% following its results this morning. Though it posted relatively robust results, with U.S. rental revenues up +8%, full year guidance suggests revenue growth is now expected to sit at the lower end of the +11% to +13% range thanks to the markedly slower pickup in film and TV related work in Canada following the settlement of the writers’ and actors’ guild disputes.
“US rental revenues could also have been stronger but were held back by lower emergency response business following the increase in adverse weather-related demand for specialty equipment seen last year.
“Early guidance for FY25F suggests mid to high single-digit rental revenue growth in the U.S is expected. This is lower than the sell-side consensus has implied, though is not surprising given it is consistent with United Rentals’ messaging.
“However, we continue to see positive momentum in manufacturing and infrastructure megaproject-related activity, where Ashtead’s win-rate is more than double its overall market share. This, coupled with the ongoing structural shift from owning equipment to renting, should pave the way for strong rental revenue growth over the medium term.”
