The last 12 months have been a bit rough for the ITM Power (LSE:ITM) share price. The once-loved hydrogen power stock has suffered yet another blow to its valuation, with the stock falling by over 40%. That continues a downward trend that started in early 2021.

However, despite what this volatile implies, the underlying company’s finally starting to deliver tangible results. Revenue in the first half of its 2025 fiscal year (ending in April) almost doubled, from £8.9m to £15.5m year-on-year. At the same time, adjusted earnings have also slightly improved from a loss of £18.1m to a loss of £16.8m.

Clearly, the firm has a long way to go. However, with more customer contracts signed and impressive technological advancements achieved, this could be the beginning of ITM Power’s long-awaited comeback.

Reducing costs through innovation

Thanks to its REFHYNE II project with Shell and two new contracts signed for its NEPTUNE V electrolyser with German customers, ITM Power’s order backlog has just hit a record high of £135m. And with the hydrogen market in Europe starting to heat up, management has already announced demand’s rising, hinting that the order book has much further to grow throughout the rest of 2025.

Encouragingly, the group’s investments in research & development are also paying dividends. In November, ITM Power announced that it had found a way to reduce the amount of iridium its electrolysers use by 40% without sacrificing performance or durability. Why does that matter?

The German Mineral Resources Agency expects demand for iridium to surge between now and 2040. But it’s actually one of the rarest metals on the planet. Due to the complexities involved in its extraction, supply’s currently not expected to keep up, resulting in a commodity that could increase in price significantly over the coming decades.

By reducing ITM’s reliance on this element for its technology, the business may have just saved itself an enormous amount of variable expenses in the long run. And while it may take some time for the bottom line to reach the black, this is yet another step closer to profitability.

What’s around the corner?

Opinions from institutional analysts are a bit mixed. Of the 17 analysts tracking the business, three still believe the stock has further to fall, giving it a Sell rating, seven remain uncertain with a Hold rating, while the remaining seven either have the stock rated as a Buy or Outperform.

However, in terms of a share price target for the next 12 months, it seems the average consensus is that ITM Power will reach 61.5p, with one analyst believing the shares could rise as high as 105p by this time next year. That means, in the best-case scenario, a £1,000 investment right now could be worth £3,486 by March 2026.

Of course, a lot of things have to go right for such an impressive return to materialise. Full-year guidance for the remainder of ITM Power’s 2025 fiscal year suggests the second half has slowed in terms of revenue and earnings. And the full-year underlying loss is actually on track to be slightly larger than 2023’s $30.4m.

This might simply be a result of growing pains on the path to becoming a global hydrogen leader. But with a spotty track record of hitting targets, an investment right now comes paired with a lot of risk. Personally, that’s not something that tempts me, given the opportunities elsewhere in the markets right now.

BAE Systems’ (LSE: BA) share price is up 42% from its 6 January 12-month traded low of £11.27.

Some investors might think the stock cannot rise much further and ignore it. Others may believe they must buy it as the bullish momentum will surely continue.

I know neither approach is useful in optimising long-term investment returns from my years as a senior investment bank trader.

Instead, I focus on two things only in a growth stock. The first is how much value remains in it and the second is its earnings growth potential.

How does the stock’s valuation look?

I always begin a share price assessment by comparing its key valuations with its peers.

BAE Systems’ price-to-earnings ratio of 25.6 is bottom of its competitor group, which averages 34.6. This comprises L3 Harris Technologies at 26.6, Rolls-Royce at 27.1, RTX at 37.8, and TransDigm at 46.8. So, it is very undervalued on this measure.

The same is true of its 1.9 price-to-sales ratio compared to the 4.3 average of its peers.

Having established a baseline undervaluation, I then look at where a stock’s price should be, based on cash flow forecasts.

The resultant discounted cash flow analysis shows BAE Systems’ is 24% undervalued at its current price of £15.99. Therefore, its fair value is £21.04, although it may go lower or higher than that.

What’s the share’s earnings growth potential?

A stock’s earnings growth powers both its share price and dividend over time. In BAE Systems’ case, analysts forecast its earnings will increase 8.4% each year to the end of 2028.

I think the main risk to this is a major malfunction in any of its key products and systems. This could be costly to fix and might damage its reputation.

That said, its 2024 results showed earnings jumped 14% year on year to £3.015bn. Sales rose the same level to £28.335bn, while profit increased 4% to £2.685bn.

Moreover, its order backlog surged 11% to a record £77.8bn, including multiple landmark deal announcements. January, for example, saw it awarded a £285m contract to upgrade the Ministry of Defence’s Royal Navy combat systems. And December brought news of a $2.5bn (£1.92bn) deal with Sweden and Denmark for new combat vehicles.

A game-changing vote in Germany?

US President Donald Trump said early in his new term that he wants European NATO members to spend 5% of their gross domestic product on defence.

Last month, his Defense Secretary told them the US’s 80-year-long defensive umbrella for Europe should not be taken for granted.

In response, 19 March saw Germany vote to exempt defence spending from its strict federal debt rules. This will free up theoretically unlimited billions of euros for spending by Germany. This will also carry across to the planned €800bn (£670bn) defence fund announced on 4 March by the European Commission.

As Europe’s biggest defence contractor and the world’s seventh -argest, BAE Systems should benefit enormously from this.

Will I buy more of the stock?

Given BAE Systems’ earnings growth potential and undervaluation, I was going to buy more on the stock shortly anyway.

The ongoing momentous change in European defence strategy further confirms to me that I am right to do so.

The last four years have been pretty brutal for the Ocado (LSE:OCDO) share price. The online grocery retailer turned robotics firm has seen its market capitalisation steadily collapse by over 90%. And even in 2025, this downward trajectory’s continued with another 20% chopped off since January.

However, with its market-cap shrinking to just shy of £2bn and its latest results reporting a £153.3m underlying profit, the group’s price-to-earnings ratio sits at just 13. That’s reasonably quite cheap for a business that, despite its challenges, is still growing by double-digits with ample liquidity.

So has all this pessimism created a turnaround buying opportunity? And if so, how much money could investors make over the next 12 months if they buy £5,000 worth of shares today?

Robotics investments delivering results

Ocado’s portfolio of automated robot-powered warehouses continues to expand steadily, with three new facilities now operational. And the impact of this was made clear with the groups’ Technology segment revenue growing by 18.1% during the year.

Perhaps what’s more encouraging is the £249m improvement in free cash flow. While Ocado’s still investing heavily in its technology solutions, the company’s inching closer to turning cash flow positive in 2026. And with depreciation and amortisation charges having now peaked, Ocado’s gap between the company’s underlying earnings and reported earnings may start to close.

Improving the quality of its financials would certainly improve investor sentiment surrounding this business. At the same time, cost-saving initiatives helping to reduce expenses along with expected margin improvements from its Technology division could be the key to propelling Ocado shares back in the right direction.

12-month share price forecast

With another seven automated warehouses scheduled to be opened over the next three years, the latest share price consensus target for Ocado sits at 268p. That’s about 12% higher versus today’s share price. And if this projection proves accurate, a £5,000 investment could be worth £5,600 by this time next year. However, this isn’t a guarantee.

Ocado’s track record doesn’t really reflect a company that has managed to consistently meet expectations or its own guidance. In fact, the group’s latest report revealed a much-larger-than-expected loss. And with guidance for 2025 coming in below analyst projections, Ocado’s share price suffered yet another crash in February.

The big question surrounding this enterprise is whether management can indeed deliver on its promise of free cash flow positivity by 2026. Personally, I remain sceptical with cash outflow for 2025, expected to be £200m, down from £223.7m in 2024. If management wants to hit its objective, the company needs to seriously pick up the pace in 2026 – a challenging task.

I can’t deny today’s cheap valuation is tempting. But with other businesses priced at similar levels with a much better track record, I think there are better investment opportunities to consider elsewhere.

The last 12 months have been another blockbuster period of outperformance for Rolls-Royce (LSE:RR.) shares. The aerospace and engineering group has rewarded shareholders with a near-110% return since March 2024. And zooming out to when new CEO Tufan Erginbilgiç moved into the corner office, the Rolls-Royce share price has erupted by almost 800%!

But with the shares now trading at a forward price-to-earnings ratio of 37, questions surrounding its valuation are getting louder. So is the stock heading north or south from here? And if someone were to invest £5,000 into Rolls-Royce shares today, how much money would they have a year from now?

A reflection of performance

Typically, when a stock surges by near-quadruple digits in the space of only a few years, it can be a sign of unrealistic expectations. And we’ve recently seen such situations in recent years with stocks like ITM Power and Avacta. Yet in the case of Rolls-Royce, the rapid rise of its share price has actually been driven by pretty phenonmenal fundamentals.

Its full-year results for 2024 revealed a 57% jump in underlying operating profits to £2.5bn, beating management’s guidance of £2.1bn-£2.3bn. Margins climbed from 10.3% to 13.8%. And with activity within the aerospace market heating up, management’s new guidance for 2025 free cash flow puts the company on track to hit its 2027 targets two years early.

Looking out to 2028, free cash flow’s now expected to reach as high as £4.5bn, with operating margins landing between 15% and 17%. And with such a positive outlook, it’s not really surprising to see investors comfortable paying a premium for this enterprise.

Is growth baked in?

Looking at the latest analyst opinions, the overall sentiment is clearly bullish, with 12 of the 18 institutions following the company’s Buy or Outperform recommendations. But when it comes to share price targets, that’s where things start to diverge a bit.

Some analysts believe Rolls-Royce’s recent turnaround is unsustainable, with a price target of 240p. Others believe we have yet to see what the business is truly capable of with a forecast of 1,150p. But overall, the average consensus is that Rolls-Royce shares will be trading at 795p by this time next year.

That’s actually almost bang on where the stock’s trading right now. And if the forecast proves accurate, then investing £5,000 in Rolls-Royce shares today would mean investors would still only have around £5,000 in a year’s time. In other words, all the future growth expectations for this business appear to be baked into its valuation.

Forecasts aren’t set in stone. And management’s developed a knack for defying expectations these past couple of years. So if the engineering giant continues to outperform, hitting the proposed 1,150p threshold might not be completely out of the realms of possibility.

Under this scenario, a £5,000 investment today could be worth £7,100. Of course, if the momentum starts to slow, then with so much growth baked in, Rolls-Royce shares could start suffering from higher volatility. And with the risk of investors demanding perfection, I think there are other opportunities in this space to explore.

Looking for the best high-yield dividend shares to buy for a long-term passive income? Here are two from the FTSE 250 I think deserve close attention:

Dividend share	Predicted dividend growth this year	Dividend yield
SDCL Energy Efficiency Income Trust (LSE:SEIT)	4%	13.9%
The Renewables Infrastructure Group (LSE:TRIG)	1%	10.4%

As you can see, dividends for these FTSE 250 shares are tipped to keep growing, resulting in high yields that smash the 3.4% FTSE 250 forward average.

If City forecasts are correct, £10,000 invested in both of these dividend shares would create a £2,430 passive income this year alone. Here’s why I’m tipping them to deliver a large and growing dividend stream today and beyond.

SDCL Energy Efficiency Income Trust

At almost 14%, the SDCL Energy Efficiency Income Trust has the highest dividend yield on the FTSE 250 today.

But unlike many ultra-high-yielding shares, this trust is no flash in the pan. Annual dividends have grown steadily since it listed on the London Stock Exchange in 2018.

Severe share price weakness has driven the trust’s dividend yield through the roof. It also means that, at 48.5p per share, the trust trades at a whopping 46% discount to its net asset value (NAV) per share.

I think this represents an attractive buying opportunity, even though threats remain on the horizon. With clean energy assets in the US, it’s vulnerable to changing environmental policy under President Trump. It may also face further interest rate pressures if new trade tariffs spike inflation.

However, the company also has significant growth opportunities regardless of what happens in the US, with operations in both Europe and Asia as well. It’s also important to remember that the green energy transition is a long-term theme, so any turbulence in North America may be temporary.

The Renewables Infrastructure Group

The Renewables Infrastructure Group (or TRIG for short) is another potentially lucrative way for income chasers to profit from the green economy. It’s a share I actually own in my own portfolio.

This company has a great dividend track record dating back to when it listed in London in 2013. Dividends have risen each year bar one (in financial 2021, when the annual payout was frozen).

As you can see from the chart, TRIG’s shares have slumped due to the pressure of higher-than-usual interest rates and the risk of higher rates persisting. Yet this means that the value on offer is similarly substantial.

The forward dividend yield is above 10%. And with its share price at 73.1p, the company trades at a 37.9% discount to its NAV per share.

Generating power from green sources can be problematic during periods of unfavourable weather. But with a geographic footprint spanning Europe, and operations spanning wind power, solar energy, and battery storage, TRIG’s deep diversification helps limit any potential damage at group level.

When it comes to London’s biggest dividend-yielding stocks, Ithaca Energy (LSE:ITH) has held the crown for a while. Among its FTSE 350 peers, the oil & gas producer currently offers investors a whopping 13.2% payout!

Usually, seeing a yield this high is a giant red flag to stay away since it’s an indicator of an incoming dividend cut. Yet, after over a year of offering a high payout, that hasn’t materialised. In fact, management recently reiterated its plans to return $500m to shareholders through dividends alone. And digging deeper, the group’s free cash flow generation seems to more than support this.

So is this time to be greedy when others are fearful? Let’s take a closer look.

Supercharging portfolio income

Ithaca owns and operates oil & gas production assets across the North Sea. And following its recent acquisition of Eni’s oil & gas fields, its portfolio and cash flows are ramping up rapidly. In fact, in its February trading update, production came in firmly ahead of expectations, delivering an average of 80,200 barrels of oil equivalents (boepd) in 2024. That landed towards the higher end of guidance and is a 14% increase from the 70,239 boepd achieved in 2023.

However, moving into 2025, production could be even more impressive. In the last quarter of 2024, production hit a peak of 138,000 boepd, with this momentum continuing into January 2025. And while oil prices have slumped in recent months, the increase in volume appears sufficient to propel revenue and earnings higher in 2025.

Needless to say, this is all rather positive. So why did analysts at Barclays recently cut their 12-month price target, from 155p to 100p?

Uncertainty remains

Barclays isn’t new to the price target-cutting party. Previously, Stifel had cut its expectations from 157p to 140p. And some analysts are projecting shares could fall to as low as 99p by this time next year.

The problem appears to lie within the political and legal landscape. Development of new North Sea oil & gas assets is unsurprisingly drumming up environmental concerns among activists. And a recent Scottish court ruling found that the approval of the development of Equinor and Ithaca’s Rosebank joint venture was unlawful.

This adds yet another hurdle for the company to overcome to maintain its growth trajectory in the coming years. And with the group’s fully-owned Cambo project still not receiving the green light for development from regulators, Ithaca’s lucrative dividend may not be around for much longer.

The bottom line

Based on the current consensus, should the group’s new North Sea projects get blocked, then Ithaca’s free cash flow generation could crumble to zero by 2033, at least when based on its current pipeline of projects. And without any excess cash being generated, dividends aren’t likely to stick around for much longer either.

Of course, this is the worst-case scenario. And so far, Ithaca’s managed to beat expectations. Personally, I think the uncertainty is a bit too much for my tastes. But for investors comfortable taking on the risk, Ithaca’s chunky dividend yield could prove to be a massive bargain, making it worthy of a closer look.

The last couple of weeks have been quite rough for the S&P 500, with the flagship American index tumbling 10% and into correction territory. However, with investors seeking to buy on the dip, some areas of the US stock market have started showing early signs of recovery and improving sentiment.

Given how quickly policies are changing in the US, it’s difficult to pinpoint whether the recent uptick is the start of a recovery or a temporary lull in the storm. Regardless, if British investors were to put £5,000 to work inside the S&P 500 today, how much money would they have 12 months from now? Let’s explore.

What to expect

In the long run, I can say the S&P 500 is likely to rise. Despite all the recent disruptions, the American economy’s one of the strongest in the world, and this has subsequently generated impressive historical gains. Typically, US stocks move up by around 10% a year.

However, in the last decade, this rate of return has improved to around 14%. If we assume that this level of performance will repeat over the next 12 months, then a £5,000 investment today could grow to £5,700 by next March. But what do the professional forecasters think?

Looking at the latest projections by The Economy Forecast Agency, the S&P 500’s on track to hit anywhere between 6,232 and 7,170 points in March 2026. That’s a potential gain of 9.8-26.3%, translating into a £5k portfolio growing to anywhere between £5,490-£6,315.

Exploring options

Every forecast needs to be taken with a healthy pinch of salt. After all, they’re built on a series of assumptions that aren’t guaranteed to come true. In fact, in most cases, they rarely do. As such, it’s entirely possible that investing £5,000 today could yield lacklustre results, or even fall into the red if investor sentiment worsens over the next 12 months.

But even if these predictions prove accurate, that doesn’t mean every S&P 500 stock’s going to be a winner. Take Adobe (NASDAQ:ADBE) as an example. Since the recent correction started, the tech giant is down by double digits. But even before the recent market volatility, the shares have been tumbling, falling by over 30% since the start of 2024.

In a combination of rising fears of disruption from AI-powered rival products, an ongoing lawsuit by the Federal Trade Commission over alleged predatory software subscriptions, and lower-than-expected guidance, Adobe shares have lost a lot of love.

Is this a buying opportunity to consider? Perhaps. After all, besides weak guidance, its latest results did actually deliver some solid revenue growth as well as securing $125m in AI software bookings of its own.

However, personally, with competition becoming increasingly fierce, Adobe’s technological moat might be shrinking. And with uncertainty surrounding the potential fallout from ongoing litigation, I’m not rushing to buy this S&P 500 stock right now.

When exploring the FTSE 250, a lot of stocks are looking cheap right now. The UK’s growth index doesn’t seem to be getting a lot of love from investors as sentiment surrounding the British economy remains pretty weak. However, despite investor attitudes, institutional analysts have started exploring the index for bargains. 

UBS has recently described the FTSE 250 as being “in the right place, at the right rate”, adding the index to its ‘top investment ideas for 2025’ list.

So why are analysts turning bullish? And could Safestore Holdings (LSE:SAFE) be one of the biggest bargains of the year?

Capitalising on domestic growth

The UK economy’s still struggling to meaningfully move in the right direction in terms of GDP growth. Yet with the government earmarking £100bn of investment through the National Wealth Fund, capital projects across infrastructure, healthcare, energy, and homebuilding are set to ramp up over the next five years.

For reference, that’s roughly the equivalent of 3.7% of GDP. And since small- and mid-cap stocks, like those found in the FTSE 250, are often closely tied to domestic demand, a boost to economic growth could prove to be a powerful catalyst for gains. Or as UBS puts it: “For those looking to ‘bet on Britain’ amid a complex global backdrop, the FTSE 250 offers a unique blend of resilience and growth potential”.

A bargain?

Safestore Holdings sits relatively comfortably towards the middle of its parent index with a market-cap of £1.3bn and a share price hovering around 610p. Yet when compared to its earnings, the stock’s trading at a dirt cheap price-to-earnings ratio of just 3.6!

The self-storage operator is currently navigating through unfavourable market conditions. With families staying put in houses longer than in previous years due to higher interest rates, consumer demand for self-storage has suffered.

Meanwhile, small- and medium-sized enterprises (SMEs) that make up the bulk of Safestore’s corporate clients also appear to be in a money-saving mode. In fact, card payment processor Dojo recently carried out some research and discovered that 30% of SMEs are struggling with financial stress, due to inflation and higher interest rates.

With that in mind, it’s not too surprising that revenue and earnings have taken a hit, dragging the share price in the wrong direction. Yet following its latest quarterly results, the worst might be over. The UK self-storage market appears to be slowly recovering, returning Safestore back to modest growth and higher like-for-like occupancy. If this trend continues, it may not be long before the Safestore share price starts moving in the right direction.

Of course, recoveries can take longer than expected. Changes to National Insurance contributions for businesses mean Safestore’s likely to see a 7-8% rise in operating costs, hitting margins. As such, the British self-storage industry may have to make considerably more progress before Safestore’s bottom line returns to growth mode.

Nevertheless, in the long run, I remain cautiously optimistic about this FTSE 250 stock, especially at its current valuation, which I feel is worth considering. That’s why it’s already in my portfolio.

For many years, the FTSE 100 index has lagged far behind its American counterparts. But perhaps the tide is finally turning in favour of low-priced value shares, rather than go-go growth stocks?

The FTSE 100 fights back

Since the global financial crisis of 2007-09, the Footsie has underperformed the S&P 500 and Nasdaq Composite. Here is each index’s rise over five years:

• FTSE 100: +66.6%
• S&P 500: +145.9%
• Nasdaq Composite: +158.5%

Alas, the UK index finishes a poor third in this race. However, here are the results over 12 months:

• FTSE 100: +9.0%

• S&P 500: +8.3%

• Nasdaq Composite: +8.3%

Therefore, while both US indexes recorded the same growth over one year, the Footsie overtook them to win gold.

Dividend delights

That’s not the end of this story. As well as capital gains, many UK shares pay out dividends. Indeed, the majority of FTSE 100 stocks pay regular dividends to shareholders, lifting the index’s dividend yield to a healthy 3.6% a year. Meanwhile, the yearly cash yield for the S&P 500 is 1.3%, and a mere 0.8% for the Nasdaq Composite.

Thus, by adding this income to the earlier capital gains, then the UK index becomes the clear winner over 12 months. About time, too!

The dividend dilemma

Still, there are three problems with dividends to note. First, future payouts are not guaranteed and be cut or cancelled at short notice. Second, not all companies pay dividends. In fact, US companies usually prefer to reinvest their profits into future growth, rather than return cash to shareholders.

The third problem I call ‘the high-yield curse’. This curse sometimes happens to companies whose dividend yields far exceed the norm. For example, are double-digit dividend yields really sustainable over the long term? And what happens when high dividends aren’t covered by ongoing earnings? There may be trouble ahead…

At its worst, this high-yield curse sometimes smash share prices. For example, when companies axe or slash formerly generous yearly dividends, their share prices can plunge overnight. This has happened repeatedly in UK sectors ranging from miners to housebuilders to telecoms firms.

One FTSE 100 firm paying a generous (8.8% a year) and rising dividend is Legal & General Group (LSE: LGEN). I’ve written about this UK insurer and asset manager many times since 2020, as I’m a big fan of this business and its strategy.

This 189-year-old household name operates three divisions: asset management, institutional retirement, and retail. Group assets under management total £1.1trn, making L&G one of Europe’s leading asset managers. Business is good, especially with pension risk transfers. Hence, the company aims to return 40% of its market value to shareholders over three years. Whoa.

Furthermore, L&G’s dividend has steadily climbed from 11.25p for 2014 to 21.36p for 2024 — almost doubling in a decade. Note the only year when this payout was not increased was in Covid-hit 2020, when it matched 2019’s payout.

Over one year, this stock is down 5.5%, but is ahead 54.2% over five years. My wife and I own this dividend duke in our family portfolio and love its high yield. That said, L&G’s profits are sure to tumble during the next market meltdown, financial crisis, or full-blown crash. Even so, its abundance of spare capital should help cushion future crises!

With the US stock market turning volatile, the FTSE 100‘s proving to be an attractive destination for investors seeking stability. After all, the UK’s flagship index has a reputation for weathering storms. Year-to-date, the FTSE 100 is beating the S&P 500 by around 8%. And during the 2022 market correction, the index was ahead by almost 20%!

With that in mind, let’s take a look at how much money investors could expect to make if they put £5,000 to work in an index tracker.

Passively building wealth

Thanks to the invention of low-cost index ETFs, investors can easily replicate the FTSE 100 and follow in its footsteps. And over the last five years, this passive investing strategy has yielded a total return of 75.8%, or 11.9% on an annualised basis.

Considering that the long-term average of this index usually has around an 8% gain a year, it perfectly demonstrates the advantage of buying shares during periods of volatility. As a reminder, five years ago today, we were in the middle of the Covid-19 stock market crash.

If the FTSE 100 maintains its current pace, a £5,000 investment today could be worth up to £5,597.23 over the next 12 months. Yet, looking at the latest predictions from The Economy Forecast Agency, growth could be even stronger, with an 11.6% capital gain paired with a 3.5% dividend yield. Under this scenario, investing £5,000 right now could grow to £5,755.

Boosting returns

The prospect of earning nearly double the average stock market return over the next 12 months is quite thrilling. However, it’s important to always take forecasts with a grain of salt. The FTSE 100 has faired well lately, but there’s no guarantee it will continue to do so. And a lot of its constituents are international giants likely being impacted by the brewing trade wars with the US.

As such, seeking such gains might be unrealistic. But perhaps not for stock pickers. Not every FTSE 100 stock is on a roll right now, with companies like Ashtead Group (LSE:AHT) down by double digits over the last six months. However, as previously highlighted, buying when prices are falling can be immensely rewarding in the long run. So are these buying opportunities?

Taking a closer look at Ashtead, the equipment rental enterprise has taken a hit on the back of a guidance cut in its half-year results. Skip ahead to March this year, and its third-quarter trading update revealed the damage, with revenue taking a 3% hit and operating profits down 7%.

A softer construction market, due to prolonged elevated interest rates, has damped demand for Ashtead’s equipment. And with economic uncertainty brewing in Ashtead’s core American market, there are concerns that growth may remain elusive for a little while longer.

Yet management remains focused on the long term, and has already reported that early signs of recovery have started to emerge now that interest rates have stabilised. That’s probably why the company’s in the middle of executing a $1.5bn share buyback programme to capitalise on its falling share price.

Assuming the rebound emerges, analysts are predicting the Ashtead share price to rise by an average of 36% over the next 12 months. As usual, there’s no guarantee. But this is one to consider and such a gain could transform a £5,000 investment into £6,825.