Barclays slashes price target for Ashtead
Ashtead Group
5,734.00p
16:40 24/04/24
Ashtead is facing a flattening off in its construction equipment end-markets, Barclays said on Monday, slashing its price target for the FTSE 100 company.
FTSE 100
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17:09 24/04/24
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10,566.99
17:09 24/04/24
Analysing how the current economic cycle might differ from the last one, Barclays felt that lead indicators "have likely peaked" and currently strong activity levels are likely to lead into flat end-market volumes in the year to April 2021 and negative in the two subsequent years.
Barclays, which cut its price target to 2,200p from 2,580p, said the "shape" of the current cycle is very different from that in 2008-10, which saw very aggressive growth followed by a sharp downturn. Currently growth has been steadier and so a less severe correction is expected. Furthermore, Ashtead has a stronger balance sheet this time.
"By the time AHT’s end market conditions have deteriorated enough to be evident in financial performance, the shares will likely be closer to a buying opportunity than a selling opportunity."