We Raise Ashtead’s FVE Following Q1 Beat and Upgrade to Guidance; Shares Remain Richly Valued

No-moat Ashtead Group raised full-year revenue guidance following first-quarter top-line growth of 23%, which exceeded management’s and our forecasts. Full-year revenue guidance was lifted by 7%, which translates into expected full-year revenue growth between 13% and 16%. The upgraded outlook is driven by a combination of high volumes and favorable pricing due to supply constraints for equipment used for construction and power generation. We increase our fair value estimate to GBX 4,000 per share from GBX 3,600, which is fully attributable to improved top-line expectations. We view shares as richly valued.