Broker tips: Ashtead, Haleon, PageGroup

by | Dec 7, 2022

Analysts at RBC Capital Markets raised their target price on equipment rental company Ashtead from 5,150.0p to 5,450.0p on Wednesday following the group’s second-quarter results.
RBC Capital said Ashtead’s “strong” Q2 earnings and raised full-year 2023 outlook had led it to lift 2023 and 2024 earnings per share estimates by roughly 6% and 9%, respectively.

As a result, RBC said its price target also pushed up as the group “continues to execute well” in its core US market, where the supply/demand balance remains “highly favourable”, driving both volume and rate improvements.

“Although some historically reliable demand indicators have rolled over, Ashtead is convinced that the non-resi project pipeline is robust and that significant fiscal stimulus creates a rich seam of counter-cyclical rental equipment demand,” said the Canadian bank.

Barclays upgraded Haleon to ‘overweight’ from ‘equalweight’ on Wednesday after a US Court threw out lawsuits alleging that GSK’s former heartburn drug, Zantac, had caused cancer.

“Zantac-related MDL litigation in the US was summarily dismissed last night, meaning it will not proceed to trial (unless successfully appealed),” Barclays.

“As such we regard Zantac as substantially derisked, leaving Haleon investible again for those without the appetite for pharma litigation risk.”

The bank lifted its price target on Haleon, which was recently spun out from GSK as its consumer healthcare business, to 360.0p from 298.0p.

Jefferies downgraded its stance on PageGroup on Wednesday as it took a look at European recruiters.

The bank cut PageGroup to ‘underperform’ from ‘hold’ because of recent share price outperformance and the fact that its premium enterprise value/net fee multiple sits at odds with its exposure to permanent recruitment and China.

Jefferies also lifted its price target on the stock to 400.0p from 360.0p.

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