- UBS increases its price target on United Rentals (NYSE:URI) to $250 from $186 after taking a deep look at the company's earnings report.
- Analyst Stephen Fisher: "We now reflect a higher level of company specific growth initiatives in our outlook, which contributes to our expectations of EBITDA growth in 2021 vs our prior estimate of a decline, and also extends out into 2022. As URI's CF was stronger in 2020 than expected, and with 2021 guidance in line with our expectations, it sets up for accretive deployment of capital heading into 2022. We see a relatively wide range for the stock over the next 6-12 months, with upside potential supported by stimulus optimism and good execution, and downside driven by broader macro and market concerns and the risk that customer optimism does not translate into the >3% growth URI expects for the second half of 2021."
- The firm has an upside case for United Rentals set at $300 and a downside cases at $200, but expects a narrower range in the near term.
- UBS forecasts URI generates adjusted EBITDA of $4.025B in 2021 and sees higher margins from increased volume and strong cost discipline. A Neutral rating is kept in place with URI cruising past the $250 PT mark. The average Wall Street PT is $274.50.