United Rentals' Upside Pinned On Scale, Resilient Customer Mix, Analyst Says

KeyBanc Capital Markets analyst Ken Newman upgraded United Rentals, Inc. URI from Sector Weight to Overweight, with a price forecast of $865.

Newman attended United Rentals’ Specialty Rental Analyst Day in Ridgefield, NJ. The analyst writes that management emphasized its strategy to capture market share by leveraging the scale of its industry-leading fleet and offerings, particularly in high-value, niche Specialty segments.

Newman views the recent decline in the stock as a compelling entry point for investors seeking a quality name with the ability to navigate macro uncertainty and benefit from an eventual market rebound.

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According to the analyst, United Rentals’ strong exposure to large National Accounts, supported by long-term mega-project activity, should help deliver more stable rental revenue and fleet performance relative to major competitors.

Newman also sees upside potential driven by the company’s healthy balance sheet, which could support additional M&A activity, especially within Specialty segments targeting niche applications.

Assuming a typical cycle recovery, the analyst estimates that bull-case EBITDA could surpass $8.6 billion by the end of 2026, including moderate M&A contributions.

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Applying a cycle-upturn valuation multiple to that outlook suggests a potential upside of over 40% from current share levels, the analyst writes.

Newman writes that despite ongoing macroeconomic volatility, United Rentals is well positioned to deliver more stable results, thanks to its strong exposure to large-scale, secular mega-projects.

With roughly 60% of total sales from large national accounts, Newman projects this customer mix to support steady fleet utilization and rental pricing.

Newman stated that the combination of United Rentals’ market-leading scale, its more resilient customer mix, a differentiated Specialty offering, and an opportunistic M&A profile could lead to an upside for guidance and forward consensus estimates.

Price Action: URI shares are trading higher by 1.23% to $704.36 at last check Thursday.

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