Results: United Rentals, Inc. Beat Earnings Expectations And Analysts Now Have New Forecasts

It's been a good week for United Rentals, Inc. (NYSE:URI) shareholders, because the company has just released its latest first-quarter results, and the shares gained 9.2% to US$691. The result was positive overall - although revenues of US$3.5b were in line with what the analysts predicted, United Rentals surprised by delivering a statutory profit of US$8.04 per share, modestly greater than expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

View our latest analysis for United Rentals

Taking into account the latest results, the current consensus from United Rentals' 21 analysts is for revenues of US$15.1b in 2024. This would reflect an okay 3.8% increase on its revenue over the past 12 months. Per-share earnings are expected to rise 7.0% to US$40.06. Before this earnings report, the analysts had been forecasting revenues of US$15.0b and earnings per share (EPS) of US$39.72 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$688. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values United Rentals at US$1,125 per share, while the most bearish prices it at US$400. We would probably assign less value to the analyst forecasts in this situation, because such a wide range of estimates could imply that the future of this business is difficult to value accurately. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that United Rentals' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.1% growth on an annualised basis. This is compared to a historical growth rate of 11% over the past five years. Compare this to the 59 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 5.7% per year. Factoring in the forecast slowdown in growth, it looks like United Rentals is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$688, with the latest estimates not enough to have an impact on their price targets.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for United Rentals going out to 2026, and you can see them free on our platform here.

And what about risks? Every company has them, and we've spotted 2 warning signs for United Rentals you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.