Investor favourite Ashtead benefits from strength of US rental rival
SILENT giant of the FTSE 100 Ashtead jumped to the top of the index as a strong showing from its equipment rental rival across the pond doused investor fears of slowing US growth.
The investor favourite advanced 51p to £17.10 after US peer United Rentals raised its full-year revenue guidance, pointing to stronger customer activity. The company also entered the Canadian market with the £167m acquisition of Contractors Rental Supply on Wednesday – an astute bolt-on, analysts said.
Jane Sparrow, the Barclays analyst, noted that Ashtead has “consistently outperformed” its US sector peer over the last three years but admitted that the results actually tell investors very little about the company’s performance.
However, the macro environment remains supportive to the Glastonbury and Donald Trump-inauguration supplier, according to broker RBC Capital Markets, with June’s Architecture Billings Index in the US showing a strong upward trend within the sector.
A slowing US market had been a key investor concern, the broker told clients. Elsewhere, easyjet nosedived to the bottom of the blue-chip index scoreboard, dragging fellow aviation stocks with it as brokers rounded on the no-frills airline. Gerald Khoo, the Liberum analyst, said that the heightened profit expectations announced by the low-cost airline were “good news, but not good enough”.
He added that the positive revenue per seat figures had been distorted by the timing of Easter and that underlying trends remained negative during the second quarter. easyjet plummeted 84p to £13.34. British Airways and Iberia-owner IAG, meanwhile, sank 24p to 595p.
Stronger-than-expected retail sales lifted high street store Next and B&Q owner Kingfisher while British American Tobacco rebounded from Tuesday’s losses after its takeover of Reynolds received shareholder backing, closing 137p higher at £54.25.
The FTSE 100 index overall finished 56.96 points higher at 7487.87, benefiting from the pound weakening against a rebounding dollar and a soaring euro.
Meanwhile, on the mid-cap 250 index,
Qinetiq’s woes extended into a second session as investors digested a pay revolt at yesterday’s annual general meeting, when 36pc of votes went against the remuneration policy and 39pc were against the 2017 incentive plan. Shares in the defence and technology group also fell by 9.6pc on Wednesday when it warned of slowing orders and margin pressure. Yesterday they slipped a further 6.2p to end at 242p.