NEW YORK (TheStreet) -- Oppenheimer raised its price target today on United Rentals (URI) stock to $127 from $122 and reiterated an "outperform" rating of the Stamford-based equipment rental company, following its Investor Day yesterday.
"Unsurprisingly, URI effectively (and proactively) segmented its oil & gas exposure, leading investors to conclude severe scenarios would likely pose only a slight (and manageable) impact on still net double-digit year-over-year EBITDA growth in 2015," analysts said.
"The spike in URI's punchbowl arrived at the end of the day," analysts said, when the company introduced "strong free cash flow guidance of $2.5 billion over the 2015 to 2017 period, via rental rate growth expectations of 3% to 4%, 3%, and 3% year-over-year in 2015, 2016, and 2017, respectively."
Additionally, the company introduced "ambitious yet achievable 2017 total revenue/adjusted EBITDA targets of $6.9 to $7.3 billion/$3.6 to $3.9 billion," analysts added.
Shares of United Rentals are up 2.04% to $115.66.
Separately, TheStreet Ratings team rates UNITED RENTALS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate UNITED RENTALS INC (URI) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and impressive record of earnings per share growth. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 6.2%. Since the same quarter one year prior, revenues rose by 17.8%. Growth in the company's revenue appears to have helped boost the earnings per share.
- UNITED RENTALS INC has improved earnings per share by 36.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, UNITED RENTALS INC increased its bottom line by earning $3.63 versus $0.64 in the prior year. This year, the market expects an improvement in earnings ($6.85 versus $3.63).
- The company, on the basis of net income growth from the same quarter one year ago, has significantly outperformed against the S&P 500 and exceeded that of the Trading Companies & Distributors industry average. The net income increased by 34.3% when compared to the same quarter one year prior, rising from $143.00 million to $192.00 million.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. When compared to other companies in the Trading Companies & Distributors industry and the overall market, UNITED RENTALS INC's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
- The gross profit margin for UNITED RENTALS INC is rather high; currently it is at 60.43%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 12.43% is above that of the industry average.
- You can view the full analysis from the report here: URI Ratings Report