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United Rentals (URI) Dips More Than Broader Markets: What You Should Know

United Rentals (URI) closed the most recent trading day at $260.01, moving -1.28% from the previous trading session. This change lagged the S&P 500's daily loss of 1.03%. At the same time, the Dow lost 1.11%, and the tech-heavy Nasdaq lost 0.13%.

Prior to today's trading, shares of the equipment rental company had lost 14.05% over the past month. This has lagged the Construction sector's loss of 11.68% and the S&P 500's loss of 10.4% in that time.

United Rentals will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $8.88, up 34.95% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $3.06 billion, up 18.05% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $31.73 per share and revenue of $11.58 billion. These totals would mark changes of +43.83% and +19.17%, respectively, from last year.

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It is also important to note the recent changes to analyst estimates for United Rentals. These recent revisions tend to reflect the evolving nature of short-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. United Rentals is holding a Zacks Rank of #1 (Strong Buy) right now.

In terms of valuation, United Rentals is currently trading at a Forward P/E ratio of 8.3. Its industry sports an average Forward P/E of 10.74, so we one might conclude that United Rentals is trading at a discount comparatively.

Also, we should mention that URI has a PEG ratio of 0.47. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Building Products - Miscellaneous industry currently had an average PEG ratio of 0.96 as of yesterday's close.

The Building Products - Miscellaneous industry is part of the Construction sector. This industry currently has a Zacks Industry Rank of 56, which puts it in the top 23% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow URI in the coming trading sessions, be sure to utilize Zacks.com.


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