Ashtead shares worth a 'buy' says analyst

Sell, sell, sell….it’s like the City is in total panic mode. Well it isn’t and in a refreshing vote of confidence, one stockbroker is actually shouting “buy” this morning and the recipient of its vote of confidence is Ashtead.

Hector Forsythe, analyst with stockbroker Evolution, explains why he sees the potential for Ashtead’s shares to rise to a value of 71p through potential developments in the United States.

United Rentals, the number one player in the US construction hire sector, had done a deal with its money lenders.

It sends out “two very loud messages” says Forsythe.

First and foremost is the confidence of United’s management to handle whatever is thrown at the business as it heads into a more challenging non-residential construction market.

Second, that banking finance is available in the sector.

“Bear in mind that AHT [the city’s abbreviated name for Ashtead] could well have £100m of cash coming its way from the disposal of Ashtead Technology,” says Forsythe.

While United Rentals is top dog in America, Ashtead’s Sunbelt subsidiary is the number two player, at half United’s size, while a close third is rival RSC.

Forsythe’s interesting last line, no doubt more than just a throw-away, is to pose the question: “Would AHT be worth more quoted in New York?”

Mmmm. Haven’t we been there before?