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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 $126.34, moving +0.86% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.09%. Elsewhere, the Dow gained 0.26%, while the tech-heavy Nasdaq lost 0.25%.

Prior to today's trading, shares of the equipment rental company had gained 22.83% over the past month. This has outpaced the Construction sector's gain of 11.42% and the S&P 500's gain of 7.92% in that time.

URI will be looking to display strength as it nears its next earnings release, which is expected to be April 17, 2019. On that day, URI is projected to report earnings of $3.10 per share, which would represent year-over-year growth of 8.01%. Meanwhile, our latest consensus estimate is calling for revenue of $2.08 billion, up 19.76% from the prior-year quarter.

URI's full-year Zacks Consensus Estimates are calling for earnings of $19.31 per share and revenue of $9.32 billion. These results would represent year-over-year changes of +18.76% and +15.86%, respectively.

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 a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. 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.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 2.13% lower within the past month. URI is currently sporting a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that URI has a Forward P/E ratio of 6.49 right now. Its industry sports an average Forward P/E of 14.7, so we one might conclude that URI is trading at a discount comparatively.

Investors should also note that URI has a PEG ratio of 0.37 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Building Products - Miscellaneous industry currently had an average PEG ratio of 0.94 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 221, which puts it in the bottom 14% 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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