United Rentals price target lowered to $475 from $515 at KeyBanc

KeyBanc analyst Ken Newman lowered the firm’s price target on United Rentals to $475 from $515 and keeps an Overweight rating on the shares following the Q1 results. Concerns around lower rental gross margins and fleet productivity are entirely due to mix impacts from the company’s recent Ahern acquisition, the analyst tells investors in a research note. While nominally lower margins could limit United Rentals’ multiple in the near-term, the company can drive total EBITDA flow-through back to its historical 50%-60% range sometime next year and think demand conditions should support healthy EBITDA growth in 2024.