NEW YORK (TheStreet) -- United Rentals (URI) shares are down by 9.30% to $94.78 in afternoon trading on Thursday, after the CEO of the equipment rental company suggested that May revenue would be a "little softer" than the company had previously expected.
CEO Michael Kneeland made the comments earlier today at the KeyBanc Capital Markets 2015 Industrial, Automotive and Transportation Conference.
Insight from TheStreet's Research Team:
Bryan Ashenberg of Real Money Pro and Growth Seeker spoke on the comments made by Kneeland at the conference today. Ashenberg stated that while Growth Seeker is not lowering its position in the company it is lowering its rating to 'Two' from 'One'. Here is what Ashenberg said:
Management made cautious comments on business in May and given those comments, we believe we have to be prudent and pull the stock off our One-rated list. That said, we believe management is top notch and can manage the costs side of the business to help alleviate some of the pain while the non-residential construction market re-gathers strength for the next move higher, which would re-energize United Rentals' business and its stock. Shares were recently down by nearly 10% on the comments.
When asked about utilization rates so far in May, CFO William Plummer answered: "It's fair to say that May is coming in a little softer than we had in mind at that point [on the last quarter earnings call] and that's certainly something that we're focused on to try to understand what might be driving that. ..."
Our bottom line: the business looks like it had a setback and we may be back to where we were just a quarter ago. We remain long-term bulls on the re-emerging strength in the non-residential construction market, and we will hold onto our shares despite current price volatility.
-Bryan Ashenberg, 'Lowering Our Rating on United Rentals', originally published on 5/28/2015 in Growth Seeker.