RBC Capital downgrades Ashtead after strong run

RBC said Ashtead is an "excellent" business and well positioned to take share into a recovery.

"However, the size and shape of a recovery is uncertain, whilst the stock has performed extremely well," it said, adding that it would recommend waiting for a better buying opportunity.

The bank, which upped its price target on the stock to 2,600p from 2,200p, said the shares have performed "very well", up 8% year-to-date after a strong performance last year and now trading at a premium of 20% to 25% to the five-year average.

Despite the lower rating, RBC said some positives remain and that the current crisis should be advantageous for two reasons.

"Firstly, we would expect Ashtead to be able to take share from smaller competitors that will be unable to invest or may even disappear in the current environment. We would also expect more M&A opportunities in this regard.

"Secondly, we would also expect the ownership to rental trend to perhaps increase with many corporates looking to reduce fixed costs and improve balance sheet strength. Not owning assets is one way of achieving that."

At 1255 BST, the shares were down 2.3% at 2,492p.