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Investing.com - RBC Capital has lowered its price target on United Rentals (NYSE:URI) to $1,123.00 from $1,152.00 while maintaining an Outperform rating on the equipment rental company. The stock, which has surged over 52% in the past six months, currently trades at a P/E ratio of 25.5x, suggesting a premium valuation relative to its near-term earnings growth potential.
The adjustment follows United Rentals’ mixed third-quarter results, where revenue growth was offset by continued margin pressures, according to RBC Capital.
The investment firm noted that margin challenges stemmed primarily from higher megaproject-related delivery costs, which it expects to be temporary rather than permanent issues for the company.
RBC Capital anticipates margins will improve once United Rentals’ project mix stabilizes and more of its equipment fleet is actively on rent with customers.
Despite the near-term challenges, RBC Capital maintains its long-term positive outlook on the equipment rental industry’s structural attractiveness and United Rentals’ competitive positioning within the sector.
In other recent news, United Rentals reported its third-quarter earnings for 2025, revealing an adjusted earnings per share (EPS) of $11.70, which missed the forecasted $12.32. Despite this, the company exceeded revenue expectations with $4.23 billion compared to the anticipated $4.16 billion, representing a 5.9% increase from the previous year. KeyBanc has reaffirmed its Overweight rating for United Rentals, setting a price target of $1,120.00. This decision follows the company’s mixed earnings results, with revenue surpassing expectations but EBITDA margins not meeting forecasts. KeyBanc noted that the margin shortfall was primarily due to a lower mix from higher ancillary and re-rent sales and higher fleet re-positioning costs. These developments reflect the ongoing challenges and opportunities faced by United Rentals in the current market environment.
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