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United Rentals (URI) Gains 47.4% in a Year: More Room to Run?
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United Rentals, Inc. (URI - Free Report) stock has gained 47.4% over the past year, outperforming the Zacks Building Products - Miscellaneous industry’s 22.1% growth. The company has been gaining from the sustained demand in its end markets and the strength of its core rental business.
Even 2023 exhibits widespread growth opportunities across its verticals, with continuous growth opportunities for non-residential and industrial verticals.
This Zacks Rank #3 (Hold) stock has a long-term earnings growth rate of 16%, which highlights its inherent strength. We believe that United Rentals offers a sound investment opportunity, as evident from its VGM Score of A.
The Zacks Consensus Estimate has witnessed an uptrend over the past 30 days as analysts raised their estimates. Over the said time frame, the Zacks Consensus Estimate for 2023 earnings increased to $40.63 from $40.01 per share. The Zacks Consensus Estimate for 2023 earnings of $40.63 per share calls for 25% year-over-year growth.
Image Source: Zacks Investment Research
However, high variable costs and intense competition are concerns. Also, worsening economic conditions, particularly in North American construction and industrial activities, may cause weakness in the end markets.
Let’s take a look at the factors supporting the growth.
Higher Infrastructural Spending & Solid 2023 Prospects: United Rentals and other construction companies are expected to benefit from strong global trends in infrastructure modernization, energy transition, national security and a potential super-cycle in global supply-chain investments. Notably, United Rentals is expected to maintain positive momentum in the near term, as the company’s solutions are closely aligned with President Biden’s policies and industry trends.
The need to rebuild the nation’s deteriorating roads and bridges and fund new climate-resilient and broadband initiatives is expected to help URI. The company expects a diverse mix of federal projects for road and bridge work, water control, harbors and ports and the power grid, which will drive growth in 2023.
URI sees substantial opportunities in 2023 across federally funded infrastructure projects, industrial manufacturing, energy and power. It expects to deliver another year of profitable growth, strong cash flow and attractive returns for shareholders.
Higher Rental Revenues: United Rentals has been witnessing widespread growth in rental revenues, which represented 83.9% of the company’s total revenues in the second quarter of 2023. During the said period, rental revenues grew 21%.
Higher Return on Equity (ROE): United Rentals’ trailing 12-month ROE is indicative of growth potential. The company’s ROE of 36.7% compared favorably with the industry’s 6.8%, which signals more efficiency in using shareholders’ funds than peers.
3 Construction Stocks Hogging in the Limelight
Some better-ranked stocks, which warrant a look in the Construction sector, include:
Sterling Infrastructure, Inc. (STRL - Free Report) provides transportation, e-infrastructure and building solutions. The Zacks Consensus Estimate for STRL’s 2023 earnings has moved north to $4.09 per share from $3.52 in the past seven days.
Fluor Corporation (FLR - Free Report) benefits from its diverse presence in various markets, which allows it to reduce the impact of market fluctuations. The company adopts a strategic approach by maintaining a well-balanced business portfolio, enabling it to prioritize stable markets while taking advantage of opportunities in cyclical markets when the timing is appropriate.
FLR presently sports a Zacks Rank #1. Its expected earnings growth rate for 2023 is 128.1%.
Willdan Group (WLDN - Free Report) is a nationwide provider of professional, technical and consulting services to utilities, government agencies and private industry.
Willdan Group presently flaunts a Zacks Rank #1. WLDN’s expected earnings growth rate for 2023 is 50%. The Zacks Consensus Estimate for WLDN’s 2023 earnings has moved north to $1.32 per share from $1.23 in the past 30 days.
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United Rentals (URI) Gains 47.4% in a Year: More Room to Run?
United Rentals, Inc. (URI - Free Report) stock has gained 47.4% over the past year, outperforming the Zacks Building Products - Miscellaneous industry’s 22.1% growth. The company has been gaining from the sustained demand in its end markets and the strength of its core rental business.
Even 2023 exhibits widespread growth opportunities across its verticals, with continuous growth opportunities for non-residential and industrial verticals.
This Zacks Rank #3 (Hold) stock has a long-term earnings growth rate of 16%, which highlights its inherent strength. We believe that United Rentals offers a sound investment opportunity, as evident from its VGM Score of A.
The Zacks Consensus Estimate has witnessed an uptrend over the past 30 days as analysts raised their estimates. Over the said time frame, the Zacks Consensus Estimate for 2023 earnings increased to $40.63 from $40.01 per share. The Zacks Consensus Estimate for 2023 earnings of $40.63 per share calls for 25% year-over-year growth.
Image Source: Zacks Investment Research
However, high variable costs and intense competition are concerns. Also, worsening economic conditions, particularly in North American construction and industrial activities, may cause weakness in the end markets.
Let’s take a look at the factors supporting the growth.
Higher Infrastructural Spending & Solid 2023 Prospects: United Rentals and other construction companies are expected to benefit from strong global trends in infrastructure modernization, energy transition, national security and a potential super-cycle in global supply-chain investments. Notably, United Rentals is expected to maintain positive momentum in the near term, as the company’s solutions are closely aligned with President Biden’s policies and industry trends.
The need to rebuild the nation’s deteriorating roads and bridges and fund new climate-resilient and broadband initiatives is expected to help URI. The company expects a diverse mix of federal projects for road and bridge work, water control, harbors and ports and the power grid, which will drive growth in 2023.
URI sees substantial opportunities in 2023 across federally funded infrastructure projects, industrial manufacturing, energy and power. It expects to deliver another year of profitable growth, strong cash flow and attractive returns for shareholders.
Higher Rental Revenues: United Rentals has been witnessing widespread growth in rental revenues, which represented 83.9% of the company’s total revenues in the second quarter of 2023. During the said period, rental revenues grew 21%.
Higher Return on Equity (ROE): United Rentals’ trailing 12-month ROE is indicative of growth potential. The company’s ROE of 36.7% compared favorably with the industry’s 6.8%, which signals more efficiency in using shareholders’ funds than peers.
3 Construction Stocks Hogging in the Limelight
Some better-ranked stocks, which warrant a look in the Construction sector, include:
Sterling Infrastructure, Inc. (STRL - Free Report) provides transportation, e-infrastructure and building solutions. The Zacks Consensus Estimate for STRL’s 2023 earnings has moved north to $4.09 per share from $3.52 in the past seven days.
STRL’s expected earnings growth rate for 2023 is 29.4%. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Fluor Corporation (FLR - Free Report) benefits from its diverse presence in various markets, which allows it to reduce the impact of market fluctuations. The company adopts a strategic approach by maintaining a well-balanced business portfolio, enabling it to prioritize stable markets while taking advantage of opportunities in cyclical markets when the timing is appropriate.
FLR presently sports a Zacks Rank #1. Its expected earnings growth rate for 2023 is 128.1%.
Willdan Group (WLDN - Free Report) is a nationwide provider of professional, technical and consulting services to utilities, government agencies and private industry.
Willdan Group presently flaunts a Zacks Rank #1. WLDN’s expected earnings growth rate for 2023 is 50%. The Zacks Consensus Estimate for WLDN’s 2023 earnings has moved north to $1.32 per share from $1.23 in the past 30 days.