Ashtead Results Highlight Ongoing Revenue Uncertainty

Ashtead's (LON: AHT) second-quarter fiscal 2025 results cast a shadow over its revenue outlook, leading Goldman Sachs to downgrade the equipment rental company from Buy to Neutral in a note this week.

The results fell short of expectations for both topline revenue and profits, prompting Ashtead to lower its guidance for US rental revenue growth this year.

It also follows downgrades to expectations in FY24 as well.

Goldman Sachs cited “ongoing uncertainty in Ashtead's revenues” as a key reason for the downgrade, pointing to weakness in the local commercial construction market.

Higher interest rates are said to be putting further pressure on the sector, with Ashtead indicating that a recovery in this segment is unlikely before the second half of calendar 2025.

This “in our view, poses risks to revenue growth for FY25 as well as FY26,” Goldman Sachs wrote.

As a result, the analysts revised their revenue and earnings estimates downward for Ashtead, cutting fiscal 2025-26 projections by an average of 5% for revenue and 13% for earnings per share.

Elsewhere this week, Ashtead announced it plans to transfer its primary stock market listing to the US, where the majority of its business is based.

Ashtead shares plunged more than 14% on Tuesday. It is down around 0.2% so far on Friday, currently trading around the 5,238p mark.