United Rentals Skyrocketed 7.85%: Can This Rental Giant's Earnings Surge Sustain Momentum?

Summary
• United Rentals (URI) surged 7.85% to $866.28, hitting an intraday high of $870.33
• Q2 revenue of $3.94B exceeded estimates by $40M while EPS of $10.47 narrowly missed forecasts
• CEO Matt Flannery highlighted $1.2B year-to-date free cash flow and 4.5% revenue growth
United Rentals delivered a blockbuster earnings report, driving a 7.25% post-earnings rally as revenue beat estimates and free cash flow surged. The stock traded within a $816-870 range, fueled by strong construction demand and strategic M&A momentum.

Earnings Beat and Free Cash Flow Fuel Rally
The 7.85% surge follows United Rentals' Q2 earnings report showing $3.94B in revenue (up 4.5% YoY) and $1.8B in adjusted EBITDA. CEO Matt Flannery highlighted $1.2B in year-to-date free cash flow and 4.5% revenue growth, while CFO Ted Grace emphasized $600M in used equipment sales. Despite a $0.03 EPS miss, the stock rallied 7.25% as investors cheered updated $15.8B-$16.1B revenue guidance and $2.4B-$2.6B free cash flow targets.

Leveraged Bullish Plays and Technical Breakouts
• 200-day MA: $729.50 (well below current price)
• RSI: 55.04 (neutral)
• MACD: 20.34 (bullish divergence from signal line 23.74)
• Bollinger Bands: Trading 7.1% above 20-day MA at $866.28
URI shows strong bullish momentum with RSI near 55 and MACD divergence. Key support at $787.73 (20-day MA) and resistance at $896.98 (52-week high).

Top Call Option: URI20250801C870
• Strike: $870 (in-the-money)
• Delta: 0.517 (moderate sensitivity)
• IV: 24.69% (reasonable)
• Theta: -2.45 (daily decay)
• Gamma: 0.0118 (strong price sensitivity)
• Turnover: 21,074 (high liquidity)
• Leverage: 62.82% (high potential return)
This contract offers optimal leverage with 62% return potential if URI reaches $896.98 (52-week high).

Second Call Option: URI20250801C875
• Strike: $875 (at-the-money)
• Delta: 0.458 (moderate sensitivity)
• IV: 24.74% (reasonable)
• Theta: -2.26 (daily decay)
• Gamma: 0.0117 (strong price sensitivity)
• Turnover: 5,156 (adequate liquidity)
• Leverage: 75.52% (high potential return)
Provides 75% return potential if URI breaks $875 and continues higher.

Payoff Analysis
• URI20250801C870: $866.28 → $896.98 (5% upside) = $26.98 profit per contract
• URI20250801C875: $866.28 → $896.98 = $21.98 profit per contract
Bulls should consider URI20250801C870 for 62% leverage or URI20250801C875 for 75% upside if $875 breaks. Watch $870 support level for confirmation.

Backtest United Rentals Stock Performance
The backtest of URI's performance after an 8% intraday surge shows favorable results, with win rates and returns indicating positive short-to-medium-term gains. The 3-Day win rate is 55.52%, the 10-Day win rate is 56.94%, and the 30-Day win rate is 64.67%, suggesting that URI tends to perform well in the immediate aftermath of such a significant increase. The maximum return during the backtest period was 8.44%, which occurred on day 59, further highlighting the potential for gains following the 8% intraday surge.

Breakout Setup Confirmed: Act Before $870 Support Fades
United Rentals' 7.85% rally shows strong continuation potential as RSI (55) and MACD (20.34) indicate bullish momentum. With $870 as key support and $896.98 as resistance, traders should act before this level fades. Watch W.W. Grainger (GWW) at +0.55% for sector cross-verification. Aggressive bulls may consider URI20250801C870 into a confirmed breakout above $870.