Ashtead: Full-Year Guidance Lowered in Unexpected Trading Update, but Long-Term Fundamentals Intact

No-moat Ashtead lowered its full-year revenue growth guidance to 11%-13% from 13%-16% to reflect fewer natural disasters than previous years, which has reduced demand for construction equipment required in the rebuilding phase. Strikes by actors and writers in Hollywood have also contributed to less demand for equipment that is commonly used in the filming industry. The shares have fallen 10% on the day, which we attribute to an elevated valuation rather than any fundamental concerns about the business. We maintain our GBX 4,850 fair value estimate and view the shares as fairly valued. Half-year results are set to be released Dec. 5.