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United Rentals Lifted to Buy at UBS on Biden Infrastructure Plan

Joe Biden's infrastructure plan would lead to a 'faster-than-expected recovery' in United Rentals’ business, UBS said, upgrading the stock.

United Rentals  (URI) - Get Report shares firmed Friday after UBS analyst Steven Fisher upgraded the world’s largest equipment renter to buy from neutral and raised his price target on the stock to $375 from $335.

Thursday's bipartisan agreement between President Joe Biden and 10 centrist senators on an infrastructure package raised Fisher’s enthusiasm.

The accord, if Congress approves it, will lead to a "faster-than-expected recovery" in the Stamford, Conn., company's business, with construction spending growing, he said.

"We think the $579 billion of incremental spending, assuming the majority goes to construction, equates to about 15% upside to current non-residential construction spending," the analyst wrote.

At Stifel, analyst Stanley Elliott also had words of praise for United Rentals. “URI … has expanded its position in heavy infrastructure/construction markets,” he said.

“We also expect accelerating cross-sell opportunities from URI's expanded higher returning specialty portfolio.”

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Elliott has a buy rating and $400 target on the stock.

URI recently traded at $318.52, up 0.5%. The shares have leaped 38% in the past six months.

In other industrials-related news, on June 15 reported that Founder Jim Cramer likes Caterpillar  (CAT) - Get Report, the world’s biggest construction machinery maker, and has liked Caterpillar for a while.

He sees it as a good target for buyers on the dip should the Fed decide to begin unloading assets and markets fall.

In April, Caterpillar posted much stronger-than-expected first-quarter earnings, thanks to a surge in construction sales.

Adjusted profit totaled $2.87 a share, up 48% from a year earlier and ahead of the Wall Street consensus forecast of $1.94. 

Revenue rose 12% to $11.9 billion, besting analysts' estimates of $11.1 billion.