The Ashtead (LSE:AHT) share price could soar when it moves its primary listing to the US. That’s certainly what the management of this equipment rental company is hoping for and this is because US-listed stocks simply trade with higher valuations than those in the UK.
However, it’s not always that simple. Let’s take a closer look at whether it’s worth considering.
Moving Stateside
Several UK-listed companies have moved Stateside in recent years, and they’ve been rather successful. This is just a snapshot, but other companies including Smurfit Westrock have also performed well after US listings.
| Company Name | Date of Primary Listing Move | Stock Price Change (%) |
|---|---|---|
| CRH | 25 September 2023 | 81% |
| Flutter Entertainment | 31 May 2024 | 42.7% |
| Arm Holdings | 14 September 2023 | 168% |
AdditionAl notes include:
- CRH shares have surged since the listing move. The company’s also expanded its share buyback programme.
- Flutter stock’s also surged since moving its primary listing and announcing a $5bn share buyback programme as well as strong revenue growth in the US.
- Arm Holdings had been taken private in a $32bn deal eight years ago. It was then listed in the US with an IPO value of $54bn. Now, 14 months later, it’s worth $144bn.
This is certainly encouraging, but it’s important to remember that each company has unique factors impacting its valuation. For example, since Arm Holdings listed in the US, chip and artificial intelligence (AI)-related stocks have surged.
Ashtead’s slumped, but things could improve
Ashtead stock slumped when it announced it would seek to move its primary listing to the US on 10 December, but that was because the announcement was accompanied by a profit warning.
The group now expects rental revenue growth of 3-5% for the year, down from 5-8%, due to a downgrade in US rental growth from 4-7% to 2-4%. And clearly that’s not positive for the business’s near-term outlook.
However, despite earnings likely falling in the fiscal 2025 (this year), things should pick up in the coming years. Earnings could grow by around 20% in both 2026 and 2027, according to forecasts. That’s a good sign for a potential US listing.
How it compares
The stock actually trades at a premium to the FTSE 100. The forward price-to-earnings (P/E) ratio is 20.4 times — that’s around 60% above the industry average. However, given the expected earnings growth, this falls to 17 times for 2026 and 14.2 times for 2027.
Interestingly, this actually puts it broadly in line with the world’s largest equipment rental company, United Rentals. The US-listed company trades at 18.2 times forward earnings, falling to 17.1 times in 2025 and 15.5 times in 2026 — Ashtead’s financial years essentially run one year ahead of United’s.
The EV-to-EBITDA ratio, which takes into account debt levels and cash reserves, highlights a small Ashstead discount, but it’s nothing to write home about.
The bottom line on its move
I really wouldn’t be surprised to see Ashtead stock surge when it lists on the NYSE, simply because of improved sentiment. There’s a strong track record for transferring listings over the past 18 months.
However, a brief comparison with United Rentals suggests Ashtead’s already trading in line with its peer. As I’m data driven, I don’t see this as an opportunity for me to buy.
