Broker snap: US looking good for Ashtead

17th Oct 2012 09:25

US market conditions are set fair for Ashtead Group, the equipment hire business, Seymour Pierce reckons.Analyst Kevin Lapwood believes that US construction confidence reaching its highest level since 2006, coupled with the announcement by one of Ashtead's main US competitors, United Rentals (URI), of top of the range results for its third quarter results, bodes well for Ashtead's US business. Lapwood said: "URI's results showed the robustness of the equipment hire industry with the shift from ownership to rental showing no signs of abating. Ashtead's shares are trading on a prospective price earnings [PE] ratio of 13.1 times, which we believe is undemanding for a company expecting to deliver double digit earnings growth over the next three years. We reiterate our BUY recommendation and raise our target price to 400p (previously 350p), equivalent to a prospective PE of 14.8 times."CM