Ashtead Technology: Here’s Why Zeus Capital is Still Bullish After Middle East Disruption

Ashtead Technology (LON: AT.) reaffirmed its full-year outlook despite ongoing Middle East disruption, and Zeus Capital says the update reinforces its bullish stance on the subsea services and equipment rental company.

In a note from analyst Daniel Slater, Zeus highlighted that Ashtead’s AGM statement confirmed first-quarter performance in line with company expectations and no change to full-year guidance.

Management described itself as “cautiously optimistic,” flagging an expected second-half weighting consistent with prior years and assuming “no sustained impact” from the current Middle East situation. Net debt is still expected to come in below 1.0 times by year-end.

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Zeus flagged the Middle East as a material contributor to group profitability, noting that the segment generated £17.8 million in revenue in 2025 at a 59.8% EBITDA margin, the highest across all of Ashtead’s divisions. The firm said it will monitor developments ahead of the July trading statement.

Looking beyond near-term risks, Zeus outlined several reasons to remain constructive on the stock. Rising oil and gas capital expenditure, expanding offshore renewables activity and a continued acquisition pipeline are all seen as key drivers of earnings growth.

Ashtead has completed eight acquisitions since 2017, most recently the £63 million Seatronics/J2 deal in 2024, and Zeus expects M&A to remain a strategic priority.

“Going forward, we look for further acquisitions, additional organic growth, and potential margin improvement opportunities to all continue driving earnings progress, in what is a broadly supportive environment for an offshore company,” Slater wrote.

Zeus left forecasts and valuation unchanged, retaining its Buy recommendation and 600p price target on the stock.