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Ashtead

Ashtead is the #2 equipment leasing company in the US under the Sunbelt brand with an 8% market share behind #1 United Rentals (13% market share pro forma for the BlueLine acquisition) and well ahead of #3 Herc Rentals at a 3% share, Home Depot at #4 at 2%, and #5 Ahern at 1%. Ashtead has accelerated the development of an operation in Canada that is still small in scale at only 3% of that market (FY 2017). The North American operation (US and Canada) totaled 87% of group revenues in 2017 while the remaining 13% is generated by the A-Plant UK operations, which leads the UK market at an 8% market share. Equipment rental is a highly fragmented market with the US serving as a secular growth engine for Ashtead with 6% growth rates expected through 2020 and Canada growing at 4% to 5% annually. The UK sees slower growth rates ahead given higher leasing penetration in the UK (~75%) than that seen in the US (~50% to 55% penetration). Favorable secular growth and a much larger market in the US allowed Ashtead's US end markets to grow by 20% to 25% since 2010 with leasing penetration expected to eventually reach 60% in the US. (28 Sep 2018)

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Focused

Ashtead: Good Cyclical Bellwether

Earnings Note: 11 Dec 2018, 7:05 PM ET - Ashtead earnings and operating data offer a reminder the cycle is not dead yet in case ISM releases were not a clear reminder this month. There are plenty of macro factors to worry about, but it takes a lot to drive a retrenchment.
Focused

Ashtead 1Q19: High Growth, Strong Trend

Earnings Note: 11 Sep 2018, 4:19 PM ET - The latest round of numbers for fiscal 1Q19 continues the bullish performance in Revenue and EBITDA growth at sustained high margins near cyclical peaks levels. Stay at Outperform.
Focused

Ashtead: In the Market

HY Note: 23 Jul 2018, 1:13 PM ET - Ashtead is in the market with 8-year 2nd lien offering to repay ABL borrowings. We continue to like the name for crossover investors and view the company as having an IG caliber credit and financial profile. 

Global HY/IG Strategy: Rising Stars

Strategy Analysis: 16 Jul 2018, 10:20 PM ET - We highlight the near- and medium-term rising star candidates from our sector research analysts. 
Focused

Ashtead: Same Story

Earnings Note: 19 Jun 2018, 10:52 PM ET - Ashtead’s operating strategy of organic investment and tuck-in acquisitions continues to deliver solid financial results.  The U.S. and Canadian markets will see a tick-up in capex during FY19, while in the U.K. it will decrease.

US Industrials: Macro Data Points

Sector Analysis: 12 Jun 2018, 1:59 AM ET - In this report, we tied the positive tone from Industrial management teams to select economic data points.

Schneider Electric: Finally Gets Around to L&T

IG Note: 02 May 2018, 12:11 PM ET - Schneider Electric announced that it has reached an agreement to acquire the Electrical and Automation business from Larsen & Toubro (L&T), with limited impact on credit metrics. Bearing this in mind, we move to a M/P on SUFP's bonds.

Parker: 3Q18 | Shifting to Market perform

Earnings Note: 26 Apr 2018, 9:13 PM ET - PH’s earnings were strong, but with the equity now under pressure and debt reduction plans nearing completion we anticipate a capital allocation change soon. We take our Outperform on the credit to a Market perform.

US Cap Goods: Event Risk = Sector Underperformance

IG Note: 21 Mar 2018, 5:23 AM ET - The Capital Goods Index has been the worst performing sector on an excess return basis year-to-date. Sector returns severely lagged the Index in January with GE and UTX being notable underperformers to date.
Focused

Ashtead: Steady Performance

Earnings Note: 06 Mar 2018, 9:34 PM ET - Ashtead remains a steady operator with a continued strategy of organic growth investments through capex and greenfield expansion while pursuing tuck-in M&A when available.  Strong demand trends have led to utilization and pricing gains. 

US Strategy: Tariffs as Repricing Event?

Strategy Analysis: 01 Mar 2018, 9:40 PM ET - The market has been building in very low odds of a trade war event, a NAFTA withdrawal, or a significant escalation of tit-for-tat trade retaliations on a broader scale.  The odds-makers just got a fresh load of input.

Section 232: The NAFTA Conundrum

Sector Analysis: 26 Feb 2018, 3:42 AM ET - Using Section 232 on Steel/Aluminum could damage supplier chains and cost structures and drive broader inflation.  A tariff gambit in such key industries could undermine the NAFTA negotiations and have immediate effects on risk pricing. 

CNHI 4Q17: Supportive Positive Trends

Earnings Note: 31 Jan 2018, 9:11 AM ET - CNHI reported results highlighting positive trends in end-market demand which contributed to better operating performance. Credit metrics continue to strengthen at the Capital Goods bellwether and we maintain our O/P on CNHI bonds.

US Industrial 2018 Outlook: Conglomerate Conundrum

Sector Analysis: 21 Jan 2018, 9:58 PM ET - Against the backdrop of a generally favorable global demand environment, event risk is the key 2018 credit concern for the conglomerate peer group. We focus on this topic and revisit our credit recommendations for more than two dozen firms.

December 2017 US Company Recommendation Changes

US Company Recommendation Changes: 01 Jan 2018, 6:36 PM ET - Our monthly report provides executive summaries for the nine company recommendation changes made on US companies during the month of December.

US HY/IG Strategy: Rising Stars

Strategy Analysis: 21 Dec 2017, 5:30 AM ET - We highlight the near and medium term rising star candidates from our sector research analysts. 

2017 Euro Conference: IG Autos & Cap Goods

Transcript: 19 Dec 2017, 11:25 PM ET - In this presentation we discuss four trends in the Auto and Capital Goods sectors – Automation, Electrification, Autonomous driving and Renewable Energy – and the steps being taken to adapt corporate strategies and evolve with the times.
Focused

Ashtead: Move to Outperform

Earnings Note: 13 Dec 2017, 11:06 PM ET - We move to Outperform on Ashtead after some recent widening versus the BBB aggregates. Ashtead presents very low business risk, a strong financial risk profile, and it has earned a long-overdue upgrade to the IG tier. 

CNH Industrial: Issuing New 10Y US$ Bonds

Worth Watching: 09 Nov 2017, 1:23 PM ET - CNH Industrial is issuing new 10-year US dollar bonds out of the CNH Industrial N.V. (parent) entity. CNH Industrial has one other US$ bond outstanding at the parent level, the 4.5% 8/2023 bond (Ba2/BBB -/BBB-), which trades at a spread of G+12 ..

Caterpillar: 3Q17 | Knocks the Cover off the Ball

Earnings Note: 24 Oct 2017, 8:11 PM ET - Caterpillar’s earning trajectory has been on a favorable trend line in 2017 and the trend continued into the third quarter with a set of strong results. The quarter did not change our view of the credit and we remain at a Market perform.

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