Ashtead Group earnings preview

Monday, 12th June 2017 14:34 - by Rajan Dhall

The Co. has been performing well of late with a 15% rise from the years low in the middle of last month. The Co. is expected to report a 22% rise in earnings tomorrow and RBC have also commented on this saying they expect earnings before tax could reach the £794M mark. It seems the construction hire Co. is benefiting from companies hiring equipment rather than buying it themselves due to economic uncertainty. Liberum who have recently upgraded the Co. noted that they feel investors have not priced in the full extent of the Co.'s US expansion. 

In terms of other broker recommendations the Co. was upgraded by analysts at HSBC Holdings to a “buy” rating with a price target of 1740p that is just shy of the yearly high. Peel Hunt reissued a “buy” rating and issued a 1800p target price target, so all looking positive there. 

Looking at the charts now, on the weekly there is a clear uptrend in progress but prices have faltered recently. We are right in the middle of the most recent value distribution and the price action on the candles is looking indecisive. Volume on this timeframe clearly favors the uptrend but lets look at this years price action more closely in another chart on a lower timeframe.