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Zacks

Bull of the Day: United Rentals, Inc. (URI)

The Zacks Building Products – Miscellaneous Industry is currently ranked in the top 21% of all Zacks Industries (52 out of 251).

According to studies, 50% of a stock's price movement can be attributed to its group, making it clear why it’s critical for investors to target stocks in a thriving industry.

A stock in the realm, United Rentals, Inc. URI sports the highly-coveted Zacks Rank #1 (Strong Buy) paired with an overall VGM Score of an A.

United Rentals, Inc. is the largest equipment rental company in the world, with an integrated network of rental locations in the United States, Canada, and Europe.

URI’s customer base includes construction and industrial companies, utilities, municipalities, government agencies, independent contractors and homeowners, and other individuals that use equipment for projects that range from simple repairs to major renovations.

Analysts have been bullish across the board over the last several months, pushing the stock into a Zacks Rank #1 (Strong Buy).


Image Source: Zacks Investment Research

Let’s take a closer look.

Share Performance

Year-to-date, URI shares have been notably defensive, down roughly 11% and widely outperforming the general market.


Image Source: Zacks Investment Research

In fact, URI shares have even outperformed the S&P 500 over a much longer five-year timeframe, up a triple-digit 106% vs. the S&P 500’s 66% return. 


Image Source: Zacks Investment Research

Posting market-beating returns across several timeframes indicates that buyers have consistently been present.  

Valuation

URI shares are more than reasonably priced, further bolstered by its Style Score of an A for Value.

The company carries a 9.3X forward earnings multiple, nicely beneath its 10.8X five-year median and reflecting a rock-solid 20% discount relative to its Zacks Industry. 


Image Source: Zacks Investment Research

Growth Estimates

URI’s growth profile is inspiring; the Zacks Consensus EPS Estimate of $31.73 for FY22 reflects a sizable 43% Y/Y uptick in earnings.

Further, the company’s bottom line is projected to tack on an additional 11% of growth in FY23.

And look out for URI’s upcoming quarterly print – the Zacks Consensus EPS Estimate of $8.88 suggests earnings growth of 35% from the year-ago quarter.


Image Source: Zacks Investment Research

Quarterly Performance

To top it off, United Rentals has consistently exceeded quarterly estimates, penciling in eight EPS beats over its last ten quarters. Just in its latest release, URI registered a sizable 20% bottom line beat.

Revenue results paint the same positive story; URI has beat top line estimates in nine of its last ten quarterly prints. Below is a chart illustrating the company’s revenue on a quarterly basis.


Image Source: Zacks Investment Research

Bottom Line

One of the best ways investors can find expected winners is by utilizing the Zacks Rank – one of the most potent market tools out there that gives investors a massive advantage.

A portfolio consisting of Zacks Rank #1 (Strong Buy) stocks has beaten the market in 26 of the last 31 years with an average annual return of 24%.

Additionally, the top 5% of all stocks receive the highly coveted Zacks Rank #1 (Strong Buy). These stocks should outperform the market more than any other rank.

United Rentals, Inc. URI would be an excellent stock for investors to keep on their watchlists, as displayed by its Zack Rank #1 (Strong Buy).


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United Rentals, Inc. (URI): Free Stock Analysis Report
 
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