On Tuesday, Baird upgraded United Rentals (NYSE:URI) stock, which is listed on the New York Stock Exchange (NYSE:URI), from Underperform to Neutral. The new price target set by Baird is $658.00 for the $45 billion equipment rental giant. According to InvestingPro data, the company maintains a "GOOD" overall financial health score, suggesting solid fundamentals despite market volatility. Baird's decision comes after observing that the growth of construction spending put in place in November was the slowest it has been in 66 months, as detailed in Baird's 2025/2026 Construction Outlook.
The analyst noted that despite the 10-year yield increasing by more than 100 basis points since mid-September and potentially reaching 5% for the first time since 2007, United Rentals stock has seen a significant decline of 22% since the day after the election, compared to the S&P 500's 2% decrease. This decline brings the stock closer to Baird's price target.
Baird mentioned that while general rental pressures are expected to persist, the specialty segment should continue to drive growth. Although 2025 earnings and possibly guidance might fall short of consensus expectations, the recent drop in United Rentals' stock price is beginning to reflect these factors.
Looking ahead, Baird sees potential upside for United Rentals from the extensive rebuilding required after the Southern California wildfires. The firm believes that the risks and rewards for investing in United Rentals are now more evenly balanced at the current stock price levels.
In other recent news, United Rentals, Inc. has been the subject of several notable developments.
The company posted record-breaking third-quarter revenues, with total earnings nearing $4 billion and rental revenues at $3.5 billion. These figures mark significant year-over-year increases, and the company's adjusted EBITDA reached $1.9 billion, boasting a margin of nearly 48%. United Rentals also reported a 24% increase in specialty rental revenue.
In response to Ashtead Group (LON:AHT)'s reduced forecast, United Rentals experienced a downturn in shares. However, analysts at Evercore ISI maintain an Outperform rating for United Rentals, citing alignment between Ashtead's comments and United Rentals' own expectations. Evercore ISI also ranked United Rentals among their top five preferred stocks, reflecting a positive outlook for the company.
Despite uncertainties tied to market conditions and inflation pressures, United Rentals remains optimistic about its growth into 2025. The company's full-year revenue is expected to fall between $15.1 billion and $15.3 billion, with adjusted EBITDA ranging from $7.115 billion to $7.215 billion. These recent developments underscore United Rentals' robust financial performance and its strong position in the equipment rental market.
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