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United Rentals (URI) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

United Rentals (URI) closed the most recent trading day at $179.02, moving +0.81% from the previous trading session. This change outpaced the S&P 500's 0.17% gain on the day. At the same time, the Dow added 0.57%, and the tech-heavy Nasdaq lost 0.34%.

Prior to today's trading, shares of the equipment rental company had gained 8.67% over the past month. This has lagged the Construction sector's gain of 8.91% and outpaced the S&P 500's gain of 8.34% in that time.

URI will be looking to display strength as it nears its next earnings release. In that report, analysts expect URI to post earnings of $4.25 per share. This would mark a year-over-year decline of 28.69%. Meanwhile, our latest consensus estimate is calling for revenue of $2.13 billion, down 14.27% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $15.26 per share and revenue of $8.35 billion, which would represent changes of -21.82% and -10.68%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for URI. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 17.87% higher. URI is currently a Zacks Rank #2 (Buy).

Investors should also note URI's current valuation metrics, including its Forward P/E ratio of 11.64. Its industry sports an average Forward P/E of 21.29, so we one might conclude that URI is trading at a discount comparatively.

Also, we should mention that URI has a PEG ratio of 0.97. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. URI's industry had an average PEG ratio of 1.87 as of yesterday's close.

The Building Products - Miscellaneous industry is part of the Construction sector. This industry currently has a Zacks Industry Rank of 18, which puts it in the top 8% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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Zacks Investment Research