Bernstein SocGen Group Upgrades United Rentals (URI) to Outperform

Bernstein SocGen Group analyst Chad Dillard upgraded United Rentals (NYSE: URI) from Market Perform to Outperform with a price target of $1,128.00 (from $885.00).

The analyst comments: "We are upgrading United Rentals to Outperform with a $1,128 price target, implying ~20% upside. This is a story of cyclical recovery and portfolio transition. The catalysts are a 12% earnings CAGR, ~20% estimate revisions, 200bps of margin improvement and +200bps ROIC growth over the next 3 years and this is not reflected in the valuation. US non-residential construction spending is on the verge of reaccelerating and URI is the biggest beneficiary in our coverage. Monetary and fiscal policy are aligning to drive non-resi spend up by 4% in 2026 then continue growing at a 6% CAGR in 2027-28. The equipment supply/demand balance is tightening as rental rates/utilization and used equipment prices bounce off the bottom and used/ new inventories come down. URI generates half of its revenues from the US non resi market, organic growth is 70% correlated to non resi, and its revenues grows 2x faster than this end market. The street is 4-5% too low on organic revenue growth over the next 3 years, which should increase at an 8-12% CAGR."

For an analyst ratings summary and ratings history on United Rentals click here. For more ratings news on United Rentals click here.

Shares of United Rentals closed at $943.42 yesterday.

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