Ashtead Group revenue rises in booming US real estate market

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Ashtead Group, a UK based equipment hire company (GB: AHT) published the results for the first quarter which ended on July 31, 2022. The group’s turnover increased by 25% and pre-tax profit increased by 28% during the period.

The company, which derives most of its revenue and profits from the US market, has gained a lot of momentum in this region. U.S. rental revenue increased 26% to $1,389 million, and total U.S. revenue increased 30% to $1,899 million.

The company added 33 new locations in North America, resulting in significant growth opportunities. It has invested $699 million in existing sites and $337 million in acquiring new sites. This will further help the company expand its key markets.

On the other hand, Ashtead faced some pressure due to rising interest costs, labor shortages and supply disruptions. As a result, the earnings forecast for the full year remains the same. However, the rental income forecast has been increased from 12%-14% to 15%-17% for the group.

The market did not react positively to such strong results. Following the announcement of the results, the stock fell nearly 3%. Over the past year, the stock had fallen 24%.

What does Ashtead Group Plc do?

Ashtead is an equipment rental company primarily serving the industrial and construction sectors. The company operates in the United States, United Kingdom and Canada, under the trade name Sunbelt Rentals.

The company specializing in the rental of equipment in the media and television industry.

Are Ashtead shares a good buy?

According to TipRanks analyst consensus, Ashtead stock has a moderate buy rating. The company has a total of seven ratings, including five buy recommendations and two hold recommendations.

Ashtead’s target price is 5,141.4p, with a high and low forecast of 6000p and 4000p, respectively. The price target implies around 22.6% upside potential.

Conclusion

With strong revenue and net profit figures reported in the results, the company remains on course for another good year with little headwind from the UK market.

Disclosure

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