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On Wednesday, JPMorgan analyst Tami Zakaria updated the financial outlook for United Rentals (NYSE:URI), increasing the price target to $920 from the previous target of $780, while maintaining an Overweight rating on the stock. According to InvestingPro data, analyst targets for URI range from $565 to $1,225, with the stock currently trading around $708. The company, valued at approximately $46 billion, appears fairly valued based on InvestingPro’s Fair Value analysis.
The adjustment followed Zakaria’s attendance at United Rentals’ Specialty Field Trip in Ridgefield Park, NJ. The event highlighted the company’s Specialty segment, which accounts for approximately 30% of its rental revenues and has an estimated total addressable market (TAM) of around $20 billion. InvestingPro data shows URI’s strong financial position with an EBITDA of $4.5 billion and a robust gross profit margin of 40%. The company maintains a "GREAT" overall financial health score, particularly excelling in profitability metrics.
During the event, United Rentals showcased the scale and capabilities of its Specialty division, as well as its strategic significance through various vertical deep dives, case studies, and a question-and-answer session with management. Zakaria expressed a reinforced confidence in the company’s growth trajectory, especially within its Specialty segment. This confidence aligns with URI’s demonstrated performance, showing a 7.2% revenue growth in the last twelve months, with total revenue reaching $15.6 billion. For detailed analysis and additional insights, investors can access the comprehensive Pro Research Report available on InvestingPro.
The analyst anticipates that United Rentals will achieve double-digit Specialty revenue growth over the medium term. This growth is expected to be driven by robust infrastructure project spending and the company’s strategies for bundling, cross-selling, and up-selling. Additionally, United Rentals’ General Rental (GenRent) services are projected to grow at a low single-digit percentage rate this year.
United Rentals’ focus on its Specialty segment is a key component of its growth strategy. The segment’s strong performance and potential for further expansion play a significant role in the company’s overall financial health and market position.
In other recent news, United Rentals reported its first-quarter 2025 earnings, showcasing robust revenue growth. The company achieved total revenue of $3.72 billion, surpassing expectations of $3.61 billion, although its adjusted earnings per share (EPS) of $8.86 fell slightly short of the forecasted $8.96. This strong revenue performance was driven by a 7.4% year-over-year increase in rental revenue, marking a first-quarter record of $3.1 billion. Additionally, the specialty rental segment exhibited impressive growth, with a 22% year-over-year increase.
Following United Rentals’ Investor Day, several financial firms adjusted their outlook on the company. JPMorgan raised its price target to $920, maintaining an Overweight rating, citing the strength of the Specialty segment as a key driver of growth. BofA Securities also increased its price target to $790, retaining a Buy rating, while UBS upgraded the stock to Neutral with a new price target of $780.
These adjustments reflect confidence in United Rentals’ strategic focus on the Specialty segment, which has shown a 20% compound annual growth rate over the past decade. Bernstein, on the other hand, maintained a Market Perform rating with a $666 price target, emphasizing the company’s cross-selling ability and technology deployment as differentiators in the market. United Rentals continues to focus on expanding its specialty services and enhancing job site productivity, aligning with its long-term growth objectives.
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