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(Sharecast News) - Analysts at Berenberg lowered their target price on subsea equipment rental provider Ashtead Technology from 700p to 650p on Friday, stating recent geopolitical volatility had impeded momentum.
Berenberg said Ashtead Technology's latest update was disappointing but broadly in line with the downside risks flagged earlier in the summer, with continued Middle East tensions pushing several second‑half projects into 2027 and denting near‑term momentum.
The German bank noted that geopolitical volatility, vessel rescheduling and wider economic uncertainty had led to project slippage not only in the Middle East but also across Europe and the Americas.
As a result, Ashtead cut its FY26 revenue guidance by around 5% and its EBITA outlook by about 15% versus prior consensus, with delays affecting a number of higher‑margin rental contracts.
Berenberg said it expects the disruption to be temporary, with the slippage largely a timing issue that could unwind into FY27, potentially leaving the group with a larger pipeline and customer backlog heading into next year.
Despite the softer outlook, Berenberg highlighted Ashtead's "robust" balance sheet, with year‑end leverage now seen at around 1.3x, supported by long‑term energy security drivers.
Following the guidance cut, Berenberg trimmed its forecasts but said the shares remain attractive at roughly 7.5x FY27 earnings, underpinned by strong fundamentals and structural growth across the energy sector.
JPMorgan resumed coverage on Drax on Friday with an 'overweight' rating following a period of restriction, with a 960p price target that implies 33% upside potential.
The bank said Drax has been utilising its balance sheet capacity to invest in new assets and businesses. JPM estimates that around 80% of group EBITDA between 2022 and 2025 came from a combination of Drax Power Station and Pellet Production, which reduces to around 40% over the period 2026-2031 as contributions increase from assets including hydro, gas plants, battery storage, and recently acquired solar and wind assets.
"We see Drax as well-positioned to create value as the UK power generation mix becomes more volatile, with the share of baseload nuclear and biomass in the UK mix gradually declining," it said. "Our 2029 EBITDA estimate is consistent with the lower end of the company's £650-£800m guidance (excluding Devex and the BSIF acquisition) and we see this as a conservative starting point with upside risk should Drax Power Station and other flexible generation assets do better than we model."
JPM expects Drax to publish a trading update in September, updating guidance to include the contribution of BSIF for 2026, and also expects an investor day "in the coming months" with an update on capital allocation priorities and refreshed medium term targets.
