LONDON (SHARECAST) - Credit Suisse has issued a very bullish research note today on the shares of plant hire firm Ashtead. More specifically, its analysts cite several factors which, when combined, make the company their favourite in the sector.
Additionally, they indicate that the company faces minimal downside risks based on their HOLT model.
For all of the above reasons they have decided to raise their price target on its shares to 400p from 316p beforehand, while reiterating their outperform rating.
This despite the 149% rise in its stock price over the last twelve months, which has seen the company´s share price outperform by no less than 120%.
In particular, they cite two reasons for the above. First of all, they highlight the fact that the structural shift to renting from owning construction equipment in the US is on track. In second place, the company has started to improve the profitability of its UK operations.
Similarly, they state that the company´s recent first quarter results were better than they had expected on earnings before interest, taxes, depreciation and amortization (EBITDA) and earnings per share (EPS). Margins in particular were strong in both the US (450bps ahead) and UK (120bps ahead).
Other “positive” risk-factors to watch out for are the possibility of a mild winter and the fact that their US EBITDA margin targets (39% estimated for this year and 41% in FY14E) remain substantially below management´s medium term guidance of around 45%.
LONDON (SHARECAST) - Credit Suisse has issued a very bullish research note today on the shares of plant hire firm Ashtead. More specifically, its analysts cite several factors which, when combined, make the company their favourite in the sector.
