Supply Chain Constraints Contribute to Ashtead Raising Full-Year Revenue Guidance; FVE Maintained

No-moat Ashtead reported solid third-quarter results, which saw Ashtead raise full-year revenue guidance for the third consecutive quarter, supported by strong demand and the rental rate environment. Rental revenue grew by 21% during the first nine months of its fiscal year, benefiting from customers unable to get their hands on construction equipment due to supply chain constraints, and thus opting for rentals. Full-year revenue guidance was lifted to between 19% and 21% from the company's previously raised guidance between 17% and 20%. However, as is typically the case, investments into a new fleet are required to satisfy demand, leaving the impact on free cash flow unchanged. We reiterate our GBX 4,000 fair value estimate and view shares as fairly valued, having seen the share price converge with our fair value estimate.