If Interest Rates Fall, United Rentals Stock Could Skyrocket on a Building Boom

• United Rentals (URI) hit a new record high on June 25.
• Shares are up more than 50% over the past year with strong technical momentum.
• The stock maintains a 100% technical “Buy” rating from Barchart and is up nearly 40% since the Trend Seeker issued a “Buy” at the end of April.
• Analysts are largely bullish on URI, although some caution that it is a “Hold” given its valuation. 

Today’s Featured Stock

Valued at $71.4 billion, United Rentals (URI) is the largest equipment rental company in the world, with an integrated network of rental locations in United States, Canada, and Europe. Its customer base includes construction and industrial companies, utilities, municipalities, government agencies, independent contractors, and homeowners, as well as anyone else who needs equipment for projects that range from minor repairs to major renovations. 

What I’m Watching

I found today’s Chart of the Day by using Barchart’s powerful screening functions to sort for stocks with the highest technical buy signals; superior current momentum in both strength and direction, a Weighted Alpha above 50+, and a 60-month beta above 1.5. I then used Barchart’s Flipcharts feature to review the charts for consistent price appreciation. URI checks those boxes. The Trend Seeker issued a new “Buy” signal on April 20. Since then, the stock has gained 39.4%.

Barchart’s Technical Indicators for United Rentals

Editor’s Note: The technical indicators below are updated live during the session every 20 minutes and can therefore change each day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com website when you read this report. These technical indicators form the Barchart Opinion on a particular stock.

United Rentals scored an all-time high of $1,143.69 on June 25.

• United Rentals has a Weighted Alpha of +53.73.
• URI has a 100% “Buy” opinion from Barchart.
• The stock has gained 52.77% over the past 52 weeks.
• United Rentals has its Trend Seeker “Buy” signal intact.
• The stock recently traded at $1,132.73 with a 50-day moving average of $983.85.
• URI has made 9 new highs and gained 17.73% over the past month.
• 60-month beta of 1.81.
• Relative Strength Index (RSI) is at 66.87.
• There’s a technical support level around $1,105.53.

Don’t Forget the Fundamentals

• $71.4 billion market capitalization.
• 25.22x trailing price-earnings ratio.
• 0.69% dividend yield.
• Analysts project revenue to grow 7.09% this year and another 7.39% next year.
• Earnings are estimated to increase 12.05% this year and an additional 14.25% next year.

Analyst and Investor Sentiment on United Rentals

• The Wall Street analysts followed by Barchart give the stock 12  “Strong Buy,” 2 “Moderate Buy,” 5 “Hold” and 1 “Strong Sell” opinions with price targets between $715 and $1,275.
• Value Line rates the stock “Above Average” with price targets between $751 and $1,789.
• CFRA’s MarketScope rates the stock a “Hold.”
• Morningstar thinks the stock is fairly valued.
• 32,670 investors are following the stock on Seeking Alpha, which rates it a “Hold.”
• Short interest is a reasonable 2.18% of the float with 2.97 days to cover the float.

The Bottom Line on United Rentals

Most analysts agree the stock is not overpriced. If interest rates come down and spark a building boom, this stock is positioned to skyrocket.

Additional disclosure: The Barchart Chart of the Day highlights stocks that are experiencing exceptional current price appreciation. They are not intended to be buy recommendations as these stocks are extremely volatile and speculative. Should you decide to add one of these stocks to your investment portfolio it is highly suggested you follow a predetermined diversification and moving stop loss discipline that is consistent with your personal investment risk tolerance.