United Rentals is Monday's IBD Stock Of The Day, as the equipment rental stock nears an early entry after five-consecutive monthly gains. URI shares edged lower Monday.
The Connecticut-based outfit, which provides construction and industrial equipment rentals, is expected to report first-quarter earnings and revenue later in April. Analysts predict 5% growth in sales and EPS. This comes as United Rentals has averaged more than 22% earnings growth over the past three quarters.
At the end of January, United Rentals issued 2024 guidance, expecting adjusted EBITDA in the range of $6.9 billion-$7.15 billion. URI also forecasts 2024 $14.65 billion-$15.15 billion in revenue.
Meanwhile, on March 15, United Rentals completed a $1.1 billion cash acquisition of Yak Access, purchasing the company from Platinum Equity. Yak predominantly serves customers in the utility and midstream verticals, and is a leader in commercial mats for surface protection across construction, maintenance, repair and operations applications. The company generated $171 million adjusted EBITDA on $353 million revenue in 2023.
This marks the second time United Rentals has purchased a business from Platinum Equity after buying Blueline Rentals in 2018 for $2.1 billion.
Recent federal laws have boosted spending on public road works and infrastructure. United Rentals stock continues to benefit from the $1.2 trillion infrastructure spending bill passed in November 2021. The company has repeatedly stated that it believes it will catch "multiyear tailwinds" from infrastructure, manufacturing and energy investments in the U.S.
In 2023, equipment sales were also buoyed by its acquisition of Ahern Rentals, the eighth largest equipment rental company in North America. That merger was finalized at the end of 2022.
United Rentals Stock
URI shares fell 0.5% to 703.58, in below-average-volume during stock market action Monday. The S&P 500 stock has found support at its 21-day moving average.
On a weekly chart, the stock has formed a flat base with an official 732.37 buy point, according to MarketSurge analysis. Aggressive investors could use URI stock's high of 717.50 on April 4 as an early entry for the S&P 500 play.
The official 732.37 entry is URI's all-time high, which it hit on March 3. United Rentals' last monthly decline was in October 2023. Since the Oct. 31 close, it has gained 74%. Meanwhile, the 18 stocks in the IBD Commercial Services-Leasing industry group are collectively up 12.7% in 2024.
Last month, Truist analyst Jamie Cook initiated coverage of the S&P 500 stock with a buy rating and a 793 price target.
Cook wrote that there appears to be above-average demand for construction equipment reflecting positives for the sector associated with U.S. investment in infrastructure. The analyst added that cash returns to shareholders will be a growing and more consistent story for United Rentals.
United Rentals stock has a Composite Rating of 97 out of 99 with a 94 Relative Strength Rating. The S&P 500 giant also has an EPS Rating of 95 out of 99.
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