Are Ashtead Shares Expensive?

VIDEO: This is why Morningstar analysts think equipment rental firm Ashtead is overvalued

James Gard 19 July, 2021 | 9:37AM
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James Gard: Each week we look at one stock that is cheap or expensive and why. Today let's look at Ashtead (AHT), which Morningstar analysts think is significantly overvalued. Ashtead rents, power equipment, forklift trucks, diggers and other equipment to the industrial sector. It has operations in the UK and United States, where it's the second biggest player in the market. Morningstar analysts think the shares are overvalued, having risen 60% in 2021, so far, and nearly 300% since March 2020. Ashtead faces many competitors in its market, which keeps prices low, and the industry is sensitive to the ups and downs of the global economy. According to Morningstar, Ashtead has a fair value of GBP36 per share, but it is currently trading around GBP56 pounds per share 

For Morningstar I'm James Gard.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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James Gard  is content editor for Morningstar.co.uk

 

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