UK-based equipment rental company Ashtead Group (GB:AHT) posted first quarter results which ended on 31 July 2022. The group revenue increased by 25% and profit before tax grew by 28% during the period.
The company, which generates most of its revenue and profits from the U.S. market, gained a lot of momentum from this region. The U.S. rental revenues were up by 26% to $1,389 million, and the total U.S. revenue was up by 30% to $1,899 million.
The company added 33 new locations in North America, which resulted in substantial growth opportunities. It invested $699 million in existing locations and $337 million in acquiring new sites. This will further help the company in expanding its key markets.
On the flip side, Ashtead faced some pressure from rising interest costs, labour shortages, and supply disruptions. As a result, the full-year profit expectations remain the same. However, the rental revenue guidance was increased from 12%–14% to 15%–17% for the group.
The market didn’t react positively to such solid set of results. Following the announcement of the results, the stock dropped by nearly 3%. In the last year, the stock had fallen by 24%.
What does Ashtead Group Plc do?
Ashtead is an equipment rental company serving mainly the industrial and construction sectors. The company has operations in the U.S., the UK, and Canada, under the trading name, Sunbelt Rentals.
The company speciality business rents equipment in 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, and two Hold recommendations.
The Ashtead target price is 5,141.4p, with a high and a low forecast of 6,000p and 4,000p, respectively. The price target implies around 22.6% of upside potential.
Conclusion
With strong top line and bottom line numbers reported in the results, the company remains on track for another good year with few headwinds coming from the UK market.
