United Rentals (NYSE:URI) Issues Earnings Results, Misses Expectations By $1.76 EPS

Key Points

• Earnings miss: United Rentals reported quarterly EPS of $9.71 vs. a $11.47 consensus (a $1.76 miss) and revenue of $3.99 billion vs. $4.20 billion expected.
• The company announced a $5.0 billion share buyback authorization (about 8.7% of shares) and raised its quarterly dividend to $1.97 ($7.88 annualized, ~1.0% yield).
• Shares fell intraday to $803.41 after the release; analysts have trimmed targets but the consensus rating remains a "Moderate Buy" with an average target of $914.88.

United Rentals (NYSE:URI - Get Free Report) announced its quarterly earnings data on Wednesday. The construction company reported $9.71 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $11.47 by ($1.76), FiscalAI reports. United Rentals had a net margin of 15.49% and a return on equity of 30.35%. The firm had revenue of $3.99 billion during the quarter, compared to the consensus estimate of $4.20 billion.

United Rentals Price Performance

Shares of URI stock traded down $2.81 during trading on Wednesday, hitting $803.41. The company had a trading volume of 572,907 shares, compared to its average volume of 649,978. The company has a quick ratio of 0.88, a current ratio of 0.94 and a debt-to-equity ratio of 1.41. The stock's 50-day moving average is $792.33 and its two-hundred day moving average is $841.99. The stock has a market capitalization of $50.53 billion, a price-to-earnings ratio of 20.77, a price-to-earnings-growth ratio of 1.31 and a beta of 1.68. United Rentals has a 52 week low of $588.35 and a 52 week high of $1,021.47.

United Rentals Increases Dividend

The business also recently declared a quarterly dividend, which was paid on Wednesday, February 25th. Stockholders of record on Wednesday, February 11th were given a dividend of $1.97 per share. This is a boost from United Rentals's previous quarterly dividend of $1.79. This represents a $7.88 annualized dividend and a dividend yield of 1.0%. The ex-dividend date was Wednesday, February 11th. United Rentals's dividend payout ratio (DPR) is currently 20.37%.

United Rentals declared that its board has authorized a stock buyback program on Wednesday, January 28th that authorizes the company to repurchase $5.00 billion in outstanding shares. This repurchase authorization authorizes the construction company to repurchase up to 8.7% of its stock through open market purchases. Stock repurchase programs are typically an indication that the company's management believes its shares are undervalued.

Insider Activity at United Rentals

In related news, EVP William E. Grace sold 1,498 shares of the company's stock in a transaction that occurred on Tuesday, February 3rd. The shares were sold at an average price of $790.89, for a total value of $1,184,753.22. Following the transaction, the executive vice president directly owned 6,872 shares in the company, valued at approximately $5,434,996.08. This represents a 17.90% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website. Also, EVP Michael D. Durand sold 2,490 shares of the company's stock in a transaction that occurred on Monday, February 2nd. The stock was sold at an average price of $791.14, for a total transaction of $1,969,938.60. Following the completion of the transaction, the executive vice president owned 7,458 shares in the company, valued at approximately $5,900,322.12. This trade represents a 25.03% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. 0.47% of the stock is currently owned by corporate insiders.

Institutional Inflows and Outflows

Institutional investors have recently modified their holdings of the stock. Sunbelt Securities Inc. increased its position in shares of United Rentals by 2,300.0% in the third quarter. Sunbelt Securities Inc. now owns 48 shares of the construction company's stock worth $46,000 after purchasing an additional 46 shares during the last quarter. Mcguire Capital Advisors Inc. bought a new position in shares of United Rentals in the fourth quarter worth approximately $49,000. Van ECK Associates Corp bought a new position in shares of United Rentals in the fourth quarter worth approximately $53,000. Strive Financial Group LLC bought a new position in shares of United Rentals in the fourth quarter worth approximately $54,000. Finally, Transamerica Financial Advisors LLC boosted its stake in United Rentals by 400.0% in the fourth quarter. Transamerica Financial Advisors LLC now owns 70 shares of the construction company's stock worth $57,000 after buying an additional 56 shares in the last quarter. 96.26% of the stock is currently owned by institutional investors.

Wall Street Analyst Weigh In

A number of equities research analysts recently issued reports on URI shares. Citigroup lowered their price objective on United Rentals from $1,090.00 to $950.00 and set a "buy" rating on the stock in a research note on Monday, February 2nd. Sanford C. Bernstein set a $903.00 price objective on United Rentals and gave the company an "outperform" rating in a research note on Thursday, April 9th. Royal Bank Of Canada decreased their price target on United Rentals from $1,123.00 to $1,041.00 and set an "outperform" rating on the stock in a research report on Friday, January 30th. KeyCorp set a $950.00 price target on United Rentals in a research report on Friday, January 30th. Finally, Truist Financial set a $972.00 price target on United Rentals in a research report on Friday, January 30th. Two equities research analysts have rated the stock with a Strong Buy rating, twelve have assigned a Buy rating, three have given a Hold rating and one has issued a Sell rating to the stock. Based on data from MarketBeat, the company presently has an average rating of "Moderate Buy" and a consensus target price of $914.88.

About United Rentals

United Rentals, Inc NYSE: URI is a leading equipment rental company headquartered in Stamford, Connecticut. The firm provides rental solutions and related services to construction, industrial, commercial, and municipal customers. Its business model centers on providing access to a broad fleet of equipment on a short-term or long-term basis, enabling customers to avoid the capital expenditure of ownership and to scale equipment use to match project needs.

The company's product and service offerings span general construction equipment and a range of specialty categories, including aerial work platforms, earthmoving and excavation machines, material handling equipment, pumps, power and HVAC systems, trench and shoring solutions, and tools.

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