Bullish indicating open at $55-$60, IPO prices at $37
Investing.com - Argus raised its price target on United Rentals (NYSE:URI) to $935.00 from $725.00 on Tuesday, while maintaining a Buy rating on the equipment rental company’s stock. The stock currently trades at $903.70, near its 52-week high of $903.61, with a market capitalization of $58.2 billion.
The research firm cited United Rentals’ record-setting performance in total revenue and adjusted EBITDA, noting the company has consistently achieved these milestones for over three years. The company generated $15.75 billion in revenue and $4.51 billion in EBITDA over the last twelve months, maintaining a healthy gross profit margin of 39.5%. Despite engaging in lower margin ancillary business during the recent quarter, margins improved sequentially. According to InvestingPro, the company maintains a "GOOD" overall financial health score, with particularly strong marks in profitability metrics.
Argus highlighted management’s confidence in the 2025 outlook, with favorable customer feedback on future projects providing good visibility for the remainder of the year. The firm also noted potential tailwinds from the pro-growth agenda under the new administration, including onshoring and energy projects, as well as anticipated lower interest rates later in 2025.
On the topic of tariffs, management believes its diverse supply chain will enable it to import new equipment as needed from tariff-free countries, and that tariffs may present opportunities as customers become more likely to rent than buy in a high-cost environment.
The firm’s analysis indicates United Rentals shares are trading well below industry peers on price/earnings metrics, supporting the maintained Buy rating alongside the significantly higher price target.
In other recent news, United Rentals reported its second-quarter earnings for 2025, showing a slight miss in earnings per share (EPS) but exceeding revenue expectations. The company posted an EPS of $10.47, just shy of the forecasted $10.50, while revenue reached $3.94 billion, surpassing the anticipated $3.90 billion. Following this performance, United Rentals raised its full-year revenue guidance by $100 million, citing higher ancillary revenues, and increased its EBITDA guidance by $50 million. This adjustment was attributed to a net merger termination benefit from the first quarter. Analyst firms have responded to these developments, with Bernstein SocGen Group raising its price target for United Rentals to $885, maintaining a Market Perform rating. Similarly, KeyBanc increased its price target to $960, keeping an Overweight rating, noting strong equipment rental revenue, particularly in Specialty growth, which rose approximately 14% year-over-year. Additionally, United Rentals launched an enhanced Confined Space Safety Training program, aimed at improving site safety and regulatory compliance. These recent developments reflect United Rentals’ strategic focus on growth and operational improvements.
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