Company Overview - United Rentals, Inc. (URI) has a market cap of $50.9 billion and operates as a leading equipment rental company across the United States, Canada, Europe, Australia, and New Zealand, providing a wide range of construction and industrial equipment rentals, sales, and related services [1] Stock Performance - Over the past 52 weeks, URI shares have declined by 5.1%, underperforming the S&P 500 Index, which has increased by 11%. However, on a year-to-date basis, URI shares have risen by 14.4%, surpassing the S&P 500's gain of 12.3% [2] - URI shares have also underperformed compared to the Industrial Select Sector SPDR Fund (XLI), which returned 4.9% over the same period [3] Financial Performance - In Q3 2025, United Rentals reported revenue of $4.23 billion, exceeding expectations, but shares fell by 7.8% the following day due to adjusted EPS of $11.70 missing forecasts. Investor sentiment has been negatively impacted by inflation, high interest rates, and rising operating costs, which have squeezed margins and reduced profitability [4] Earnings Forecast - For the fiscal year ending December 2025, analysts predict a slight decrease in adjusted EPS to $43.13. United Rentals has a mixed earnings surprise history, having topped consensus estimates in one of the last four quarters while missing in three [5] Analyst Ratings - Among 22 analysts covering URI, the consensus rating is a "Moderate Buy," consisting of 12 "Strong Buy" ratings, two "Moderate Buys," seven "Holds," and one "Strong Sell" [5] - The current analyst sentiment is more bullish than three months ago, with nine "Strong Buy" ratings. Argus Research analyst Kristina Ruggeri has raised the price target to $945 while maintaining a "Buy" rating. The mean price target of $991.32 indicates a 23.9% premium to current price levels, while the highest price target of $1,169 suggests a potential upside of 46.1% [6]

Core Viewpoint - United Rentals reported mixed Q3 2025 results, with earnings per share (EPS) missing estimates while revenues exceeded expectations, indicating a complex performance landscape for the company [2][5]. Financial Performance - Adjusted EPS was $11.70, missing the Zacks Consensus Estimate of $12.49 by 6.3%, and decreased 0.8% year-over-year from $11.80 [5]. - Total revenues reached $4.229 billion, surpassing the consensus mark of $4.157 billion by 1.7%, and grew 5.9% year-over-year [5]. - Equipment Rentals revenues increased 5.8% year-over-year to $3.665 billion, marking a record high for the third quarter [6]. Segment Performance - General Rentals segment revenues grew 3.1% year-over-year to a record $2.4 billion, but rental gross margin contracted 90 basis points to 36.7% [8]. - Specialty segment revenues improved 11.4% year-over-year to a record $1.265 billion, although rental gross margin contracted 490 basis points to 45.1% due to higher depreciation expenses [9]. Margins and EBITDA - Total equipment rentals' gross margin contracted 200 basis points year-over-year to 39.6% [10]. - Adjusted EBITDA grew 2.2% year-over-year to $1.946 billion, but the adjusted EBITDA margin contracted 170 basis points to 46% [11]. Balance Sheet and Cash Flow - As of September 30, 2025, cash and cash equivalents were $512 million, with total liquidity at $2.452 billion and long-term debt at $12.6 billion [12]. - Net cash from operating activities improved 12.5% year-over-year to $3.934 billion, while free cash flow decreased 1.6% year-over-year to $1.192 billion [13]. Share Repurchase and Dividends - The company completed a $1.5 billion share repurchase program and initiated a new $2 billion program, repurchasing $1.28 billion worth of common stock and distributing $350 million in dividends [14]. 2025 Guidance - Total revenues are now expected to be in the range of $16-$16.2 billion, an increase from the previous expectation of $15.8-$16.1 billion [15]. - Adjusted EBITDA is projected to be between $7.325 billion and $7.425 billion, up from the earlier estimate of $7.3 billion to $7.45 billion [15]. - Free cash flow is expected to be in the range of $2.1-$2.3 billion, revised down from the prior expectation of $2.4-$2.6 billion [17]. Market Sentiment - Recent estimates for the stock have been trending downward, leading to a Zacks Rank of 4 (Sell), indicating expectations of below-average returns in the coming months [18][20].

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Core Insights - United Rentals, Inc. (URI) experienced a 5.2% decline in share price after the release of Q3 2025 results, with earnings per share (EPS) missing estimates while revenues exceeded expectations [1][10] Financial Performance - The company reported record third-quarter revenues of $4.229 billion, surpassing the consensus estimate of $4.157 billion by 1.7%, and reflecting a year-over-year growth of 5.9% [4][10] - Adjusted EPS was $11.70, missing the Zacks Consensus Estimate of $12.49 by 6.3%, and decreased 0.8% from the prior year's adjusted figure of $11.80 [4][10] - Adjusted EBITDA grew 2.2% year over year to $1.946 billion, although it fell short of the estimate of $1.98 billion, with the adjusted EBITDA margin contracting 170 basis points to 46% [9][10] Segment Performance - Equipment Rentals revenues increased 5.8% year over year to a record high of $3.665 billion, with fleet productivity up 2% [5] - General Rentals segment saw a 3.1% year-over-year revenue growth to $2.4 billion, while the rental gross margin contracted 90 basis points to 36.7% [7] - Specialty segment revenues improved 11.4% year over year to $1.265 billion, but the rental gross margin contracted 490 basis points to 45.1% due to higher depreciation expenses [8] Balance Sheet and Cash Flow - As of September 30, 2025, United Rentals had cash and cash equivalents of $512 million, up from $457 million at the end of 2024, with total liquidity at $2.452 billion [11] - Long-term debt increased to $12.6 billion from $12.23 billion at the end of 2024, with a net leverage ratio of 1.86x [11] - Net cash from operating activities improved 12.5% year over year to $3.934 billion, while free cash flow decreased 1.6% year over year to $1.192 billion [12] Future Outlook - The company raised its 2025 revenue guidance to a range of $16-$16.2 billion, up from the previous expectation of $15.8-$16.1 billion, indicating confidence in ongoing demand [14] - Adjusted EBITDA is now expected to be between $7.325 billion and $7.425 billion, an increase from the prior projection of $7.3 billion to $7.45 billion [14] - Net rental capital expenditure is anticipated to be in the range of $2.55-$2.75 billion, with net cash provided by operating activities expected to be $5-$5.4 billion [15]

Financial Data and Key Metrics Changes - Total revenue grew by 5.9% year over year to $4.2 billion, with rental revenue increasing by 5.8% to $3.7 billion, both setting third-quarter records [7][17] - Adjusted EBITDA reached a record of over $1.9 billion, resulting in a margin of 46% [8][19] - Adjusted EPS was reported at 11.7 [8] Business Line Data and Key Metrics Changes - Specialty rental revenue increased by 11% year over year, driven by growth across all product offerings and 18 cold starts [8][9] - Ancillary and re-rent revenue grew over 10%, contributing an additional $69 million [18] - Fleet productivity increased by 2%, contributing to an OER growth of 4.7% [8][19] Market Data and Key Metrics Changes - The construction end market saw strong growth in both infrastructure and non-residential construction, while the industrial end market showed strength in power [9] - The demand for used equipment remained healthy, with $619 million of OEC sold at a recovery rate of 54% [9][10] - Year-to-date, the company expects to sell approximately $2.8 billion of fleet this year [10] Company Strategy and Development Direction - The company is focused on being the partner of choice for large projects, leveraging its scale, technology, and value proposition [14][15] - The updated guidance reflects confidence in delivering solid results, with total revenue growth expected to be around 5% to 6% excluding used sales [13][22] - The company plans to continue investing in both organic and inorganic growth, with a robust M&A pipeline [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand environment, expecting momentum to carry into 2026 [6][14] - The company is proactively managing costs, particularly in delivery and fleet repositioning, to mitigate challenges [20][72] - Management noted that while margins are under pressure from costs, the core profitability of the business remains strong [82] Other Important Information - The company returned over $730 million to shareholders through share buybacks and dividends in the quarter, with a full-year target of nearly $2.4 billion [12][21] - The balance sheet remains strong with net leverage of less than 1.9 times [12][21] Q&A Session Summary Question: Demand profile and CapEx cadence for 2026 - Management clarified that the accelerated CapEx in Q3 was to meet existing demand and not a pull forward from 2026, with expectations for growth CapEx in 2026 [27][28] Question: Pricing strategy for ancillary services - Management acknowledged the need to rethink pricing for ancillary services, which have become a larger part of the business, while noting that delivery costs are a significant component [30][31] Question: Local market growth and impact of rate cuts - Management indicated that local markets are currently flat, with potential upside if rate cuts lead to increased construction activity [50][51] Question: Large project dynamics and customer sentiment - Management reported strong demand from large projects, with a robust pipeline and positive customer sentiment [39][102] Question: Infrastructure investment outlook - Management expressed confidence in continued infrastructure investment, supported by federal and state initiatives, and noted that the demand for infrastructure remains strong [94][95]

Financial Data and Key Metrics Changes - Total revenue grew by 5.9% year over year to $4.2 billion, with rental revenue increasing by 5.8% to $3.7 billion, both setting third quarter records [5][14] - Adjusted EBITDA reached a record of over $1.9 billion, resulting in a margin of 46%, while adjusted EPS was reported at $11.7 [5][14] - Year-to-date free cash flow was $1.2 billion, with expectations to generate between $2.1 billion and $2.3 billion for the full year [9][21] Business Line Data and Key Metrics Changes - Specialty rental revenue increased by 11% year over year, driven by growth across all product offerings and the opening of 47 cold starts year to date [6][14] - Ancillary and rerent revenue grew over 10%, contributing an additional $69 million to total revenue [15] - Fleet productivity increased by 2%, contributing to an overall equipment rental (OER) growth of 4.7% [5][15] Market Data and Key Metrics Changes - The construction end market saw strong growth in both infrastructure and nonresidential construction, while the industrial end market showed particular strength within power [6][7] - The used equipment market remained healthy, with $619 million of original equipment cost (OEC) sold at a recovery rate of 54% [8][15] Company Strategy and Development Direction - The company is focused on maintaining a customer-centric model, which is seen as a key driver of growth and competitive differentiation [4][12] - Plans to spend over $4 billion on fleet this year to capitalize on current demand and anticipated growth in 2026 [8][9] - The company aims to balance organic growth through capital expenditures with inorganic growth through disciplined M&A, while returning nearly $2.4 billion to shareholders [10][21] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the demand environment, expecting momentum to carry into 2026, with a focus on being the partner of choice for large projects [4][12] - The company anticipates continued strong demand, particularly from large projects, and is adjusting its CapEx guidance accordingly [20][21] - Management acknowledged challenges related to cost dynamics, particularly in delivery and fleet repositioning, but remains focused on supporting customer growth efficiently [17][20] Other Important Information - The company returned over $730 million to shareholders in the quarter through share buybacks and dividends, with plans to return nearly $2.4 billion for the full year [10][19] - The leverage ratio remains low at less than 1.9 times, providing flexibility for future M&A opportunities [10][19] Q&A Session Summary Question: Demand and CapEx for 2026 - Management clarified that the accelerated CapEx in Q3 was to meet existing demand and not a pull forward from 2026, with expectations for growth CapEx in 2026 [24][25] Question: Pricing for Ancillary Services - Management acknowledged the need to rethink pricing for ancillary services, which have become a larger part of total rental revenue, but emphasized the importance of being responsive to customer needs [26][28] Question: Local Market Dynamics - Management indicated that local markets are currently flat, with growth primarily driven by large projects, and expressed optimism about potential improvements in the local market in 2026 [46][48] Question: Infrastructure Investment Outlook - Management noted that infrastructure remains a strong market, supported by ongoing demand and funding from various sources, including federal initiatives [99][100] Question: Margin Dynamics and Acquisitions - Management discussed the impact of acquisitions on margins, noting that while they can be dilutive, they are strategically beneficial and necessary for long-term growth [123][124]

Core Viewpoint - United Rentals (NYSE: URI) has shown strong performance over the past year, with a gain of approximately 17%, despite concerns regarding a slowdown in construction activity [1] Company Performance - The company has successfully shifted its focus towards specialty rentals, which has contributed to its resilience against market fears [1] Market Context - The performance of United Rentals reflects a broader trend in the industry where companies are adapting to changing market conditions and consumer demands [1]

Third Quarter 2025 Investor Presentation © 2023 United Rentals, Inc. All rights reserved. I 1 Introductory information Unless otherwise specified, the information in this presentation, including forward-looking statements, is as of our most recent earnings call held on October 23, 2025. We make no commitment to update any such information contained in this presentation. Certain statements in this presentation are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of ...

Core Insights - United Rentals (NYSE: URI) has shown strong performance over the past year, with a gain of approximately 17% [1] - The company has successfully navigated concerns regarding a slowdown in construction activity by shifting its focus towards specialty rentals [1] Company Performance - United Rentals' stock has increased by about 17% in the last year, indicating robust market performance [1] - The company's strategic pivot towards specialty rentals has helped it mitigate risks associated with potential declines in construction activity [1]