UPDATE: Oppenheimer Downgrades McGrath RentCorp from Outperform to Perform

Oppenheimer downgraded McGrath RentCorp

from an Outperform to a Perform rating. Oppenheimer commented, “MGRC's 2Q12 EPS of $0.42 surprised to the downside vs. our estimate/consensus of $0.49/$0.48. Rental revenue growth slid to 5.7% y/y (following seven consecutive double-digit quarters) vs. our 7.5%. A return to double-digit top-line growth via Adler Tank Rental's long-term prospects, and an ultimate recovery from the currently stable Mobile Modular segment remain plausible. However, we're downgrading MGRC to Perform from Outperform and removing our $38 price target on near-term pressure persisting through 2H12” McGrath RentCorp closed at $26.61 on Tuesday.