United Rentals (URI) Stock Forecast & Price Target

United Rentals, as the largest equipment rental company in North America, commands a significant 16% market share in a fragmented industry, benefitting from a growing trend towards rental over ownership, with penetration rates rising from approximately 40% in 2003 to 55-60% in 2022. The company's strategic acquisitions of GFN and Yak have positioned it to surpass growth targets and solidify its status as a comprehensive one-stop shop for its customers, enhancing its operational capabilities. Additionally, a $300 million increase in rental equipment capital expenditure guidance for 2025, driven by robust demand in nonresidential sectors and stable growth in infrastructure-related activities, supports a positive outlook for continued revenue growth into 2026.

United Rentals reported Q3 revenue of $4,229 million, surpassing forecasted figures, but faced pressures with Adjusted EPS of $11.70 falling below consensus estimates. Despite revenue growth of 5.9% year-over-year, concerns linger regarding declining margins, particularly in equipment rentals, as gross margins fell by 103 basis points due to market normalization and lower equipment pricing. Furthermore, the outlook is clouded by risks associated with potential downturns in nonresidential construction activities and challenges related to integrating acquisitions, raising substantial concerns about sustained performance in a softened demand environment.