Ashtead Group plc (LON:AHT) Just Reported First-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

Last week saw the newest first-quarter earnings release from Ashtead Group plc (LON:AHT), an important milestone in the company's journey to build a stronger business. Ashtead Group missed revenue estimates by 3.0%, coming in atUS$2.7b, although statutory earnings per share (EPS) of US$0.90 beat expectations, coming in 2.2% ahead of analyst estimates. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

See our latest analysis for Ashtead Group

Taking into account the latest results, the current consensus from Ashtead Group's 17 analysts is for revenues of US$11.4b in 2025. This would reflect a modest 4.4% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to increase 2.9% to US$3.66. Before this earnings report, the analysts had been forecasting revenues of US$11.7b and earnings per share (EPS) of US$3.81 in 2025. It's pretty clear that pessimism has reared its head after the latest results, leading to a weaker revenue outlook and a minor downgrade to earnings per share estimates.

Despite the cuts to forecast earnings, there was no real change to the UK£62.39 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Ashtead Group analyst has a price target of UK£84.00 per share, while the most pessimistic values it at UK£48.00. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Ashtead Group's revenue growth is expected to slow, with the forecast 5.9% annualised growth rate until the end of 2025 being well below the historical 14% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 3.6% annually. So it's pretty clear that, while Ashtead Group's revenue growth is expected to slow, it's still expected to grow faster than the industry itself.

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. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Ashtead Group analysts - going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Ashtead Group that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.