Yahoo Finance Results: Ashtead Group plc Exceeded Expectations And The Consensus Has Updated Its Estimates
Ashtead Group plc (LON:AHT) just released its quarterly report and things are looking bullish. The company beat both earnings and revenue forecasts, with revenue of UK£1.2b, some 4.3% above estimates, and statutory earnings per share (EPS) coming in at UK£0.32, 172% ahead of expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Ashtead Group after the latest results.
Check out our latest analysis for Ashtead Group
After the latest results, the consensus from Ashtead Group's 14 analysts is for revenues of UK£4.73b in 2021, which would reflect a small 5.0% decline in sales compared to the last year of performance. Statutory earnings per share are forecast to plunge 26% to UK£1.08 in the same period. Before this earnings report, the analysts had been forecasting revenues of UK£4.66b and earnings per share (EPS) of UK£1.16 in 2021. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.
The consensus price target held steady at UK£28.16, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Ashtead Group analyst has a price target of UK£41.00 per share, while the most pessimistic values it at UK£19.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that sales are expected to reverse, with the forecast 5.0% revenue decline a notable change from historical growth of 17% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 2.5% annually for the foreseeable future. It's pretty clear that Ashtead Group's revenues are expected to perform substantially worse than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Ashtead Group. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. The consensus price target held steady at UK£28.16, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Ashtead Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Ashtead Group analysts - going out to 2025, and you can see them free on our platform here.
Plus, you should also learn about the 1 warning sign we've spotted with Ashtead Group .
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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