Will Ashtead continue to benefit from a US infrastructure boom?

Tool hire firm reported its end-markets were ‘robust with ongoing momentum’ in March

US-focused construction equipment hire group Ashtead (AHT) is set to report its full-year results on 13 June with investors hoping for its recent strong performance to be sustained.

In its third-quarter trading update in March, the company described its end-markets as ‘robust with ongoing momentum’ and said it expected its full year results to be ahead of previous expectations.

Third-quarter revenue was up 23%, leading to a 25% rise in nine-month turnover to $7.2 billion and a 36% increase in underlying EPS (earnings per share) over the same timeframe to $2.89. This was thanks to higher rental rates and a higher level of fleet utilisation.

With the business clearly receiving a lift from federal and state-funded infrastructure projects, and a notable improvement in its specialty hire business, analysts duly raised their forecasts for the year to 30 April to $9.7 billion of sales and EPS of $3.80.

The shares have had a nice run of late, so a certain amount of good news is already baked into the current price, but Ashtead has a habit of beating forecasts as it continues to grow market share both organically and through bolt-on acquisitions.

As it grows, so it benefits from greater economies of scale meaning margins and returns on capital employed edge up, which in turn allows it to invest in the business and at the same time return capital through share buybacks and dividends. [IC]

Can Adobe live up to its emerging AI hype?

Creative design software giant has been on a rip as investors look for long-run upside

They’ll be plenty for investors to watch when Adobe (ADBE:NASDAQ) unloads its latest quarterly results next week (15 June), with AI (artificial intelligence) excitement having lit a fire under the share price in recent weeks.

The stock has added roughly 30% since the middle of May with investors seeing the creative design software giant as a major long-run AI winner, but there are more immediate matters to focus on too, not least the regulatory rabbit hole that its proposed $20 billion acquisition of Figma seems to have disappeared down.

When forecast-busting first quarter earnings were posted (15 March) investors took the view that a growth miss late last year was a blip rather than something more harmful. We’ll see. Adobe had steered investors to expect EPS (earnings per share) in the range of $3.75 to $3.80 on an adjusted basis on $4.75 billion to $4.78 billion in revenue for the second quarter, and analysts have nudged estimates towards the top of that range over past weeks.

Adobe chairman and CEO Shantanu Narayen has previously singled out Adobe’s Creative Cloud, Document Cloud and Experience Cloud offerings as ‘mission-critical in fuelling the global digital economy’, and we would expect him to reaffirm those claims this time round, with a healthy sprinkling of AI terminology used in commentary. [SF]

UK UPDATES OVER THE NEXT 7 DAYS

FULL-YEAR RESULTS

June 9: Industrials Reit

June 13: Oxford Instruments, Tatton Asset Management, Iomart, Mind Gym, BP Marsh & Partners

June 14: Ashtead, Castings, Motorpoint, Marks Electrical, Severfield, Eckoh

June 15: Molten Ventures, Halma, Halfords, Syncona Limited, Norcros

HALF-YEAR RESULTS

June 13: Atrato Onsite Energy, Driver, Hamak Gold

June 14: Safestore Holdings

TRADING ANNOUNCEMENTS

June 13: Bellway

June 15: Fuller, Smith & Turner

US UPDATES OVER THE NEXT 7 DAYS

QUARTERLY RESULTS

June 9: NIO, Tatneft

June 12: Uranium Energy, Eaton Vance

June 13: Braze

June 14: Renew Energy Global, Oxford Industries, Planet Labs

June 15: Adobe, John Wiley & Sons

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