United Rentals (URI) PT Lowered to $1,000 at KeyBanc

KeyBanc analyst Ken Newman lowered the price target on United Rentals (NYSE: URI) to $1,000.00 (from $1,120.00) while maintaining an Overweight rating.

The analyst commented: "We highlight OW-rated names AIT, TRS, and URI as we believe they are the best positioned and most likely candidates to execute material M&A. While most balance sheets across our coverage are relatively healthy, our methodology focuses on identifying companies with solid track records for improving ROIC. We think these names are likely to see the largest benefit from acquisitions and will avoid pursuing deals for the sake of capital deployment. Specifically, AIT is the most under-levered name on our list, with a solid track record of ROIC improvement over the past five years. For TRS, we acknowledge management has a choppy history with M&A, but the Company has ample dry powder following the divestiture of its Aero business, which we think will mostly be deployed toward a combination of share repurchases and Packaging-oriented deals. Additionally, URI has a strong history of executing large transactions, and we think the Company could pursue another $1B+ deal within its higher-margin Specialty business. While we are modestly lowering our PT to reflect a more conservative approach to out-year multiple expansion, we think any progress on margin-accretive deals would likely drive upside to out-year estimates in consensus and our model."

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