United Rentals: Keybanc Raises PT to $1075 from $960, Maintains Overweight Rating

United Rentals: Keybanc Raises PT to $1075 from $960, Maintains Overweight Rating

Keybanc Capital Markets has upgraded its price target for United Rentals (URI) to $1075 from $960, while maintaining an overweight rating for the stock. The upgrade reflects the investment bank's optimism about the company's ability to sustain its stock outperformance and navigate near-term challenges. The decision comes on the heels of URI's strong performance in the second quarter of 2025, which saw the company post record revenue and raise its full-year outlook [2].

URI's stock has been a standout performer in the equipment rental sector, outpacing broader market benchmarks in 2025. The company's disciplined capital allocation strategy, robust free cash flow generation, and expansion into high-growth construction and industrial niches have been key drivers of its success [1]. Keybanc's analysts highlight URI's ability to maintain a strong balance sheet and generate consistent free cash flow, which they believe will support the company's long-term growth prospects.

However, the analysts also acknowledge the risks associated with margin compression and integration challenges from recent acquisitions. They note that URI's response to these challenges, including passing through inflationary costs to customers and optimizing supply chain efficiency, has been effective but may face limitations in a competitive rental market. Keybanc's upgrade reflects its confidence in URI's operational discipline and pricing power, which have allowed the company to maintain fleet utilization above 85% and generate healthy used equipment sales.

For investors, Keybanc's upgrade suggests that URI remains a compelling case, despite the risks. The company's strategic alignment with secular trends in infrastructure, coupled with a strong balance sheet and disciplined management, positions it to navigate near-term challenges. However, investors should closely monitor the company's integration costs from recent acquisitions and margin volatility in the general rental segment.

In conclusion, Keybanc's upgrade to $1075 reflects its optimism about URI's ability to sustain its stock outperformance and navigate near-term challenges. While the risks associated with margin compression and integration challenges remain, the company's capital allocation discipline, free cash flow strength, and focus on high-growth construction and industrial sectors provide a durable foundation for long-term value creation.

References:
[1] https://www.ainvest.com/news/united-rentals-resilience-sustaining-stock-outperformance-margin-pressures-2508/
[2] https://simplywall.st/stocks/us/capital-goods/nyse-uri/united-rentals/news/united-rentals-uri-valuation-spotlight-after-record-q2-sales