Oppenheimer Previews United Rental Earnings

• United Rentals, Inc. URI is scheduled to announce its third quarter financial results next Wednesday.
• One week before the call, analysts at Oppenheimer preview the results, assuring that they are likely to come in as expected. Thus, they reiterate an Outperform rating and $85.00 price target on the stock.
• Shares of United Rentals are up almost 0.5 percent on Wednesday trading.

According to a report issued Wednesday, Oppenheimer analysts Scott Schneeberger and Daniel Hultberg anticipate third quarter results relatively in line with the market’s expectations. The note that, while “industry fleeting/oil & gas fleet absorption headwinds” probably remained a headwind (although an expected one), they believe persistent growth in non-residential construction is “adequate to play a sufficiently mitigating factor relative to expectations.”

After the company and the Street reset expectations for the second half of the year at an apparently achievable level, and with unfavorable sub-cycles (industry fleeting/oil & gas fleet absorption) likely dissipating over the next 12 months, Oppenheimer expects a slightly positive reaction to third quarter results probably (pretty much) in line with estimates.

Related Link: Morgan Stanley: Machinery Stocks Face 'Doom And Gloom,' But This One Could Survive

For the third quarter of 2015, Oppenheimer envisions earnings of $2.33 per share on revenue of $1.558 billion. The Street, for its part, expects consensus revenue in line with Oppenheimer; however, the EPS estimate stands at $2.37.

United Rentals offers “multi-year growth (cyclical/secular via market expansion), margin, and free cash flow expansion potential (with share repurchases lending [downside] support).” Thus, the experts think the current valuation is quite attractive for investors with a horizon of at least 12 months.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.