Ashtead shares "attractive" on growth prospects, says Berenberg

10th Dec 2014 09:39

Berenberg has repeated its 'buy' recommendation for Ashtead, saying the consensus forecasts should rise after the equipment-rental company's strong first half.Ashtead impressed the market on Wednesday by reporting that underlying pre-tax profit jumped by 33% to a record £265.5m in the six months to 31 October on revenues that rose 23% to £987.3m.The company also guided to full-year results "ahead of our previous expectations".In the second quarter alone, underlying operating profits were up 35% at £161.1m, better than the £149.4m Berenberg had pencilled in, while second-quarter revenues rose 24% to £529.4m, above the broker's £499.2m forecast."The results show that the company continues to benefit from the non-residential construction recovery in the US, take market share and improve its margin as it benefits from its scale and strong underlying rate growth in the market," said Berenberg analysts Josh Puddle and Simon Mezzanotte.Due to the upbeat outlook, the analysts reckon that full-year forecasts should rise around 4.5%."On a December 2015 price-to-earnings of 16.3 for three-years earnings growth of 24.8%, we believe the shares are attractive," they said.They kept a 1,170p target price for the stock, which was up 7.9% at 1,162p by 10:39.