RSC Holdings Leaps After Analyst Upgrade

NEW YORK (AP) — Shares of RSC Holdings Inc. leaped Tuesday afternoon after an analyst upgraded the construction-equipment rental company, saying the sector could be poised to recover based on a survey of industry managers.

Shares of competitors H&E Equipment Services Inc. and United Rentals Inc. climbed too, even though UBS Investment Research analyst Henry Kirn lowered his estimates on all three companies. A rally in the broader market helped to buoy the stocks.

Almost 90 percent of the branch managers surveyed expected conditions to improve in their industry over the next year, while 65 percent see recovery within the next two quarters, Kirn said.

Kirn said the rate of decline for industrial production in the U.S. in the current quarter should slow compared with the end of last year, and potential benefits from the U.S. stimulus package may help equipment-rental companies.

"Although we still believe that weakness in global industrial activity will persist through 2010...we believe that window has opened in which the risk/reward for machinery names has improved meaningfully," Kirn wrote in a note to investors.