Ashtead's stock has made steady progress since the end of June after being down 48% for the year. Now only down 22% for the year.

Overview

Ashtead Group PLC is a multinational equipment rental company with national networks in the UK, Canada and the United States. Ashtead rents a full range of industrial and construction equipment across a wider range of applications to a diverse customer base. The company is based in London and it is listed on the London Stock Exchange as a constituent of the FTSE 100.

Financials

Looking at the 2022 financials against 2021, revenue rose by $1,333bn YoY with operating profit up from $1,498bn in 2021 to $1,947bn in 2022. EBITDA went up by $573 million YoY with EPS growing to $280.9 from $205.4. Additionally, total assets rose by $2,006bn but so has total liabilities. Total liabilities rose by $721m, however, the increase in total assets offsets the increase in total liabilities. Operating costs rose from $3,601bn in 2021 to $4,352 in 2022 and net debt went up by $1,360bn. Although $1,691bn net cash was used in investing activities compared to only $315 million in 2021 which could have been used to offset operating costs or net debt. Ideally, the investment activities should bring ROI in the next few years.

Technicals

From a technical overview, its current share price sits at $48.41 a share. Towards the upside, a major resistance level sits at $49.12 (highlighted by a red oval). A break above this resistance point could see the share price climb above $50+ a share in the short term. Towards the downside, the support base is established with support levels sitting at $45.64 then at $44.51 then at $42.56. A break below the $42.56 support may see the stock retreat from its gains since the end of June and decline further. Looking at the indicators, MACD is currently positive and so is RSI as it reads 68. However, RSI is floating just below ‘overbought’ territory. If RSI ends up within the territory, a short-term dip could occur.

Summary

The company saw a fairly big jump in revenue YoY with an increase in operating profit by almost $450 million. Total assets outweigh the total liabilities by almost $1,300bn, hence, all-in-all the company runs a profitable business. There has been an increase in operating costs and a big jump in net debt, however, a big chunk of net cash ($1,691bn) has been used for investment activities which could have been distributed elsewhere. Nevertheless, the investments over the next few years should show a positive ROI that helps boost the company's financials. On the basis of the technicals, the indicators are both showing to be positive with potential for further uptrend. But, it is important for traders and investors to take the RSI into consideration, as it is on the verge of ‘overbought’ territory.