Opinions Gordon Reid
United RentalsURIPAST TOP PICKFeb 07, 2024
Gordon ReidStock price when the opinion was issued
As of Jun 05, 2026. Market Open.
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URI was just at all-time-highs this past October and was up 18% YTD, now taking a round trip after earnings, so we don't think any thing has 'broken' here. Their guidance for 2026 was in-line with expectations and for the recent quarter, revenue came in at $4.21 bln vs $4.26 bln expected. EPS of $11.09 missed estimates of $11.78. The company is planing to buy back over $1 billion in shares in the next year as well. URI does tend to be volatile around earnings and we think the move after earnings was a bit extreme given the actual results. Regardless, we don't think a whole lot has changed here and while the quarter might not have been perfect, we don't think it was particularly noteworthy (for good or bad).
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URI is in a bit of a drawdown like the rest of the market after hitting all-time highs in October. Nothing has really changed here and we would not be concerned witht he company. It is well run, has been through numeroud types of markets, increases the dividend, repurchases shares, and has a bit of a moat due to the size and scale of the business that is hard to catch up to. Recent earnings were fine with revenues ahead of estimates. EPS was a bit short of estimates but nothing particularly concerning. The company will have exposure to any broad economic slowdown but the valuation helps account for some of this and they have some support from the current AI infrastructure buildout in the shorter-term as well.
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URI is in a bit of a drawdown like the rest of the market after hitting all-time highs in October. Nothing has really changed here and we would not be concerned witht he company. It is well run, has been through numeroud types of markets, increases the dividend, repurchases shares, and has a bit of a moat due to the size and scale of the business that is hard to catch up to. Recent earnings were fine with revenues ahead of estimates. EPS was a bit short of estimates but nothing particularly concerning. The company will have exposure to any broad economic slowdown but the valuation helps account for some of this and they have some support from the current AI infrastructure buildout in the shorter-term as well.
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URI is in a bit of a drawdown like the rest of the market after hitting all-time highs in October. Nothing has really changed here and we would not be concerned witht he company. It is well run, has been through numeroud types of markets, increases the dividend, repurchases shares, and has a bit of a moat due to the size and scale of the business that is hard to catch up to. Recent earnings were fine with revenues ahead of estimates. EPS was a bit short of estimates but nothing particularly concerning. The company will have exposure to any broad economic slowdown but the valuation helps account for some of this and they have some support from the current AI infrastructure buildout in the shorter-term as well.
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URI is in a bit of a drawdown like the rest of the market after hitting all-time highs in October. Nothing has really changed here and we would not be concerned witht he company. It is well run, has been through numeroud types of markets, increases the dividend, repurchases shares, and has a bit of a moat due to the size and scale of the business that is hard to catch up to. Recent earnings were fine with revenues ahead of estimates. EPS was a bit short of estimates but nothing particularly concerning. The company will have exposure to any broad economic slowdown but the valuation helps account for some of this and they have some support from the current AI infrastructure buildout in the shorter-term as well.
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URI is in a bit of a drawdown like the rest of the market after hitting all-time highs in October. Nothing has really changed here and we would not be concerned witht he company. It is well run, has been through numeroud types of markets, increases the dividend, repurchases shares, and has a bit of a moat due to the size and scale of the business that is hard to catch up to. Recent earnings were fine with revenues ahead of estimates. EPS was a bit short of estimates but nothing particularly concerning. The company will have exposure to any broad economic slowdown but the valuation helps account for some of this and they have some support from the current AI infrastructure buildout in the shorter-term as well.
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Has grown earnings 22% annually, on average, for last 10 years. PE is ~20x. Sees lots of runway ahead. Market share is 15% in a highly fragmented business. Operates well. Growth organically and via strategic acquisitions. A company to watch, especially with the 100's of billions of infrastructure $$ floating around. Yield is 0.74%.
(Analysts’ price target is $923.38)Gordon ReidA competitor reported softer results which took some of the wind out of the sails of the shares and in general, a lot of these more economically sensitive names have seen these larger drawdowns on no real news. Fear of higher rates is likely having an impact as investors become concerned on its impact on economic activity and homebuilding. At 14.4X forward earnings, we think URI looks fine here. We always like having 'more' information especially when earnings are so close so might wait for that even before adding but overall don't see much fundamentally that has changed here.
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Growth rates for earnings are roughly double those of CAT, yet the valuations are very similar. More bang for your buck. In his US small-cap portfolio. Still likes it here.
Gordon Reid
Now at 15x earnings, still 20% discount to market. When a stock price rises, ideally you want the multiple to stay the same. It would mean organic growth matches price appreciation, both moving forward at the same time. With a dramatic move in price, ask yourself if you still want to hold?
Economically sensitive. Be careful. Don't want to own it into a recession. Deep recession would hurt. Market seems on solid economic ground, so he's holding. If it gets too big in the portfolio, he'll trim. Still likes it.
Look at the background. Companies like this live on government spending. US government's passing all kinds of bills to support the economy, like CHIPS and Infrastructure, to the tune of $2T. URI will get a big piece of this money.