United Rentals, Inc. (NYSE:URI) is playing a visible role in the construction boom taking place across the U.S, and that boom is helping drive the construction equipment rental company’s earnings to new heights and their stock along with it. According to Charles Payne on Fox Business News on Friday, the current heights of both are not nearly the limit.
“URI is United Rentals, and I’m telling you right now, if you see any construction in any major city in this country, you’re gonna see their logo on the side of the equipment. Keep an eye on it, I love it, love the management,” Payne said.
United Rentals, Inc. (NYSE:URI)’s stock has soared 50% year-to-date, and more than 100% over the past calendar year, on the strength of four consecutive quarters where the company outperformed estimates by an average of 14.2%. During the most recent quarter, the company had earnings per share of $1.65, a 47% increase over the previous year, and a 15% surplus over analysts’ expectations of $1.43 per share.
Revenue is benefiting from a U.S construction industry that is reaching activity levels not seen in half a decade. In July, construction spending was at its highest levels in five and a half years, with gains across the board in both private business and residential construction, as well as government outlayed construction projects.
Despite the general construction positivity, Terex Corp., which also deals in construction equipment, lowered their profit guidance for the year and has seen their stock tumble today as a result, and that could have some small short-term effect on United Rentals, Inc. (NYSE:URI)’s stock as well if investors get cold feet for construction-related companies.
Still, Jefferies Group today raised their price target on United Rentals, Inc. (NYSE:URI) to $138 from $125 today, which appears to be offsetting the other news. United Rentals, Inc. (NYSE:URI) is up marginally after morning trading today.