United Rentals stock price target raised to $1,025 from $835 at UBS

Investing.com - UBS raised its price target on United Rentals (NYSE:URI) to $1,025 from $835 while maintaining a Neutral rating following the company’s third-quarter earnings report. Currently trading at $897.22, InvestingPro analysis suggests the stock is trading above its Fair Value, with a P/E ratio of 23.14x and a price-to-book multiple of 6.53x.

The investment bank noted that United Rentals continues to generate modest but steady growth with good returns in what it described as a "cooler but still solid demand environment" in 2025. The company maintains a healthy gross profit margin of 39.51% and has achieved revenue growth of 6.77% over the last twelve months. UBS observed that margins have been under pressure as the company works harder to maintain utilization, with additional ancillary services affecting margin mix.

UBS views United Rentals’ strategy of offering ancillary services as prudent for retaining and growing market share, positioning the company favorably for future demand reacceleration, despite the current margin trade-offs. The firm highlighted that United Rentals has increased its capital expenditure plans for 2025, with a significant portion allocated to the general rental fleet, demonstrating confidence in its near to medium-term outlook. InvestingPro data shows the company maintains a moderate debt level with a debt-to-equity ratio of 1.6x and a strong Altman Z-Score of 4.02, indicating financial stability.

The investment bank expects a reacceleration in non-residential construction in the second half of 2026 and into 2027, driven by continued structural investments and cyclical tailwinds. While acknowledging that United Rentals’ valuation appears high in a historical context, UBS believes it is supported by the outlook for potential reacceleration and the company’s demonstration of a steadier business model.

UBS cautioned that an inflection in fundamentals is likely still two to three quarters away, with potential risks including further moderation in fleet productivity, weakening demand, and persistent or intensifying margin pressures, though it views the risk-reward profile as improving. The stock has shown strong momentum with a 56.51% return over the past six months. For deeper insights into United Rentals’ valuation and growth prospects, InvestingPro subscribers can access the comprehensive Pro Research Report, which includes detailed analysis of the company’s financial health and future potential.

In other recent news, United Rentals reported its third-quarter earnings for 2025, with revenue surpassing expectations at $4.23 billion compared to the forecasted $4.16 billion, marking a 5.9% increase from the previous year. However, the company missed its adjusted earnings per share (EPS) forecast, reporting $11.70 against an anticipated $12.32. RBC Capital responded by lowering its price target for United Rentals to $1,123 while maintaining an Outperform rating, citing mixed results with revenue growth offset by margin pressures. KeyBanc also maintained its Overweight rating with a price target of $1,120, attributing margin weakness to lower ancillary and re-rent sales and higher fleet re-positioning costs. These developments reflect the mixed third-quarter results, with revenue exceeding expectations but EBITDA margins falling short. Investors are closely monitoring the company’s financial health following these announcements.

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