United Rentals Price Target Bumped Up By ~13% At KeyBanc

  • KeyBanc analyst Ken Newman raised the price target for United Rentals, Inc. URI to $425 (an upside of 37.9%) from $375 while maintaining the Overweight rating on the shares.
  • The analyst states that following an eventful 2Q22 earnings season, they are reiterating a bullish view for Equipment Rental and Construction Machinery coverage.
  • According to Newman, the improving non-res. construction trends should support more resilient earnings outlooks in both 2022 and 2023.
  • The analyst mentions that an acceleration in mega-project activity could support further upside to consensus estimates in coming years as recently passed federal stimulus packages become more meaningful beginning in 2023.
  • Newman expects to see continued growth in larger projects to support secular build-outs for semiconductor fabs, industrial reshoring, and energy/petrochem production, which should more heavily favor URI vs. its smaller competitors given its position as the largest player in the industry, he further added.
  • The analyst believes that potential benefits from infrastructure and other federal stimulus packages are not being reflected in URI stock. He thinks these projects could contribute more than ~$1 billion in incremental EBITDA once groundbreaking begins to ramp.
  • Price Action: URI shares are trading lower by 2.64% at $308.32 on the last check Monday.
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