Ashtead downgraded as US slowdown clouds outlook
Last updated: 09:56 29 Apr 2025 EDT, First published: 07:56 29 Apr 2025 EDT
Ashtead Group PLC (LSE:AHT) shares came under pressure on Tuesday after analysts at RBC Capital downgraded the equipment rental giant to 'sector perform' from 'outperform', warning that a slowdown in the US could hit demand harder than expected.
The downgrade comes with a sharp cut to earnings forecasts, even though revenue estimates were only trimmed by 6% for 2026 and 13% for 2027.
Because of the way Ashtead’s business is structured, with high operating and financial gearing, a relatively small hit to revenues translates into much bigger drops in profits.
Analysts now expect earnings per share to fall by 21% in 2026 and 33% in 2027, putting them about 25% below broader market expectations.
Ashtead, which has already seen its share price fall 18% this year, was also hit by a big reduction in price target, cut from 6,750p to 4,125p.
The next 12 to 18 months look set to be challenging.
The shares were down 2% on Tuesday.
** Update: Share price updated **
