It's been a good week for Ashtead Group plc (LON:AHT) shareholders, because the company has just released its latest first-quarter results, and the shares gained 3.0% to UK￡54.10. Results look mixed - while revenue fell marginally short of analyst estimates at US$2.7b, statutory earnings beat expectations 2.2%, with Ashtead Group reporting profits of US$0.90 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Ashtead Group

Taking into account the latest results, the most recent consensus for Ashtead Group from 17 analysts is for revenues of US$11.4b in 2025. If met, it would imply an okay 4.4% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to rise 2.9% to US$3.66. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$11.7b and earnings per share (EPS) of US$3.81 in 2025. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

The analysts made no major changes to their price target of UK￡62.39, suggesting the downgrades are not expected to have a long-term impact on Ashtead Group's valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Ashtead Group analyst has a price target of UK￡84.00 per share, while the most pessimistic values it at UK￡48.00. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We would highlight that Ashtead Group's revenue growth is expected to slow, with the forecast 5.9% annualised growth rate until the end of 2025 being well below the historical 14% p.a. growth over the last five years. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 3.7% per year. Even after the forecast slowdown in growth, it seems obvious that Ashtead Group is also expected to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Ashtead Group. Regrettably, they also downgraded their revenue estimates, but the latest forecasts still imply the business will grow faster than the wider industry. The consensus price target held steady at UK￡62.39, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Ashtead Group. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Ashtead Group analysts - going out to 2027, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 1 warning sign for Ashtead Group you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.