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Wednesday, Bernstein analysts maintained their Market Perform rating and a $666.00 price target for United Rentals (NYSE:URI) stock, which currently trades at $715.47 with a market capitalization of $46.5 billion. According to InvestingPro data, the company maintains a GREAT financial health score, though 13 analysts have recently revised their earnings expectations downward for the upcoming period. The firm’s analyst, Chad Dillard, provided insights following United Rentals’ specialty investor day. During the event, United Rentals reaffirmed its goal of reaching $7 billion in specialty revenue by 2028, which would represent a compound annual growth rate (CAGR) of 12%. This ambitious target builds upon the company’s current strong performance, with total revenue reaching $15.58 billion in the last twelve months and an impressive EBITDA of $4.52 billion.
Dillard highlighted that United Rentals aims to drive specialty rental penetration and increase job site productivity. He noted that the specialty segment is less penetrated compared to the general rental market, offering significant growth potential. The demand for trench safety products is growing due to Occupational Safety and Health Administration (OSHA) compliance requirements, as trench collapses are a leading cause of fatalities in construction. United Rentals supports its customers with a dedicated team of 30 engineers to assist with trench design.
The analyst pointed out three key differentiators for United Rentals: their cross-selling ability, technology deployment, and service offerings. United Rentals’ cross-selling strategy has set them apart from competitors, as illustrated by case studies where the company not only secured initial jobs but also managed to upsell specialty products during the project lifecycle. For one large data center project, specialty rentals constituted 40% of rental revenues.
Furthermore, United Rentals is enhancing technology use on construction sites. This includes the adoption of wearable devices to monitor labor productivity and tools with tracking capabilities. These technologies integrate with their Total (EPA:TTEF) Control system, providing a comprehensive view of job site operations.
Finally, Dillard mentioned United Rentals’ unique service offerings, such as logistics and engineering capabilities, which are challenging for competitors to replicate. These services contribute to the company’s total addressable market (TAM) expansion through various vectors. The reaffirmation of the specialty revenue target and the strategic initiatives discussed at the investor day support the analyst’s current rating and price target for United Rentals stock.For investors seeking deeper insights, InvestingPro offers comprehensive analysis of United Rentals’ valuation metrics, including its P/E ratio of 18.41 and detailed growth projections. The platform provides exclusive access to over 10 additional ProTips and a detailed Pro Research Report, helping investors make more informed decisions about this prominent player in the Trading Companies & Distributors industry.
In other recent news, United Rentals reported robust first-quarter 2025 earnings, with total revenue reaching $3.72 billion, surpassing the forecasted $3.61 billion. The company achieved a record rental revenue of $3.1 billion, marking a 7.4% increase year-over-year. Despite posting an adjusted earnings per share (EPS) of $8.86, slightly below the forecast of $8.96, the market responded positively, reflecting confidence in United Rentals’ growth trajectory. Analysts from JPMorgan raised the price target for United Rentals to $920, maintaining an Overweight rating, while UBS upgraded the stock to Neutral, increasing the price target to $780. BofA Securities also lifted its price target to $790, retaining a Buy rating, highlighting the company’s strategic focus on its Specialty segment. The Specialty segment, a key growth driver, was emphasized during United Rentals’ Investor Day and Specialty Field Trip, showcasing its potential and competitive advantage. The segment represents approximately 30% of rental revenues, with an addressable market of around $20 billion. These developments underscore United Rentals’ strategic focus and growth potential in the rental equipment sector.
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