United Rentals: Resilience Amid Fluctuations in Q3 Earnings
United Rentals, Inc. (URI), the world’s largest equipment rental company, boasts a robust presence with rental locations across the U.S., Canada, and Europe. With a market capitalization of $56.2 billion, the company operates through its General Rentals and Specialty segments.
Stock Performance: A Stellar Year
Over the past year, United Rentals has significantly outperformed the overall market. As of 2024, URI stock has surged by 49.5% and 84.6% over the last 52 weeks, markedly exceeding the S&P 500 Index’s ($SPX) gains of 25.8% and 31.8% during the same periods.
When comparing URI’s performance to the Industrial Select Sector SPDR Fund (XLI), URI also shines with a growth of 25.6% in 2024 and 35.4% over the past year.
Q3 Earnings: Insights and Analysis
Despite its strong performance, URI stock declined by 1.1% following the release of its Q3 earnings on October 23, where earnings fell short of Wall Street expectations. The adjusted earnings per share (EPS) rose by a modest 60 basis points from the previous year to $11.80, but this was 5.5% below analysts’ estimates, raising concerns among investors.
Nevertheless, United Rentals demonstrated resilient overall performance, achieving record third-quarter results. The company reported over 6% year-over-year revenue growth, reaching approximately $4 billion, largely propelled by a 7.4% increase in equipment rental revenue, totaling $3.5 billion.
Future Outlook: Analysts’ Predictions
For the current fiscal year, which ends in December, analysts project a 6.7% rise in adjusted EPS, expecting it to reach $43.46. URI has shown a mixed record of earnings surprises, having exceeded bottom-line estimates in three of the past four quarters.
The consensus rating for URI stock is a “Moderate Buy.” Out of 19 analysts, eight recommend a “Strong Buy,” one suggests a “Moderate Buy,” six advise “Hold,” and four recommend “Strong Sell.”
This sentiment reflects a slightly more positive outlook compared to three months ago, when a consensus “Hold” rating prevailed among the analysts, with seven recommending a “Strong Buy.”
On November 20, Argus Research analyst John Eade upheld a “Buy” rating and raised the price target to $880, suggesting a possible 2.7% upside from the current trading levels.
Currently, URI trades above its average price target of $832.67, while the highest target from analysts sits at $1,004, indicating a 17.2% potential premium to its current level.
On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here. More news from Barchart
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
