Sticking With This United Rentals Price Target for the Long Game

Coming off the earnings call held on Thursday morning by United Rentals (URI) , for the time being, we are maintaining our Two rating and our $1,000 price target.

We are doing this to reflect a few things, including that the gross margin pressure we flagged and the prospects for those margins to remain restrained in the near-term as United continues to jockey equipment to meet demand. Second, we recognize that we are moving into the seasonally slower time of the year for construction, and the housing market, which has been a headwind for the overall construction market, is poised to remain one near term.

However, as United confirmed during its earnings, non-residential construction activity should benefit from not only data center construction but also from infrastructure, semiconductor, hospital and power facilities, as well as airport construction. As those projects get underway and mature, and United's need to move equipment falls, we should see United’s margin profile return to higher levels. That suggests some of the bottom-line impact should be reversed in the coming quarters, a signal that 2026 EPS expectations may need to be revised higher in the coming months.

While United management stopped short of giving any formal 2026 guidance, the team shared that it sees another year of good growth ahead. For that reason, the company has stepped up its capital spending program for this year so it will be positioned to address that demand. We continue to see construction activity improving as we move through 2026, as the monetary policy moves from restrictive to more neutral territory, leading to further improvement in interest rates.

Our Plan for URI Shares

As it relates to URI shares, over the last several days, we’ve seen multiple price target increases from the likes of Truist, Citi, BofA, KeyBanc and others to the $1,080 to 1,194 range. Odds are that some of those, especially at the higher end, will be revised lower as those folks revise their near-term margin expectations. That could provide some additional pressure in the near-term, and while URI shares may not reach the next layer of support at $872, we will be watching it closely.

Should we see URI shares fall to that level, that would provide a nice pick-up point for us. Keeping in mind our position size in URI shares, any eventual move we might make would likely be on the smaller side.

Market Reaction to URI Earnings Reinforces Thinking

We would also note that the reaction we are seeing in URI shares on Thursday reinforces our earlier comments that unless companies deliver consensus-topping September quarter results and guidance, their shares are likely to give back some of their recent gains. Recognizing this allows us to be prepared to not only digest these moves but also to think more about potential opportunities.

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At the time of publication, TheStreet Pro Portfolio was long URI.