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United Rentals Gains 4% on Strong Q4 Results; Announces $1B Share Buyback

Shares of United Rentals, Inc. (URI) rose 4% in Wednesday’s extended trade after the company reported upbeat results for the fourth quarter of 2021 and impressive capital deployment activities. The company engages in the equipment rental business.

Adjusted earnings increased 46.6% to $7.39 per share year-over-year, exceeding the Street’s estimate of $6.76 per share. Revenues rose 21.8% to $2.78 billion and surpassed analysts’ expectations of $2.74 billion.

The company witnessed equipment rentals sales growth of 24.7% year-over-year. Meanwhile, income from sales of rental equipment grew 17.8%. Fleet productivity increased 10.3% from the same quarter last year due to better fleet absorption.

Meanwhile, United Rentals’ board of directors authorized a new $1 billion share repurchase program, which is scheduled to commence in the first quarter of 2022. The company plans to complete the buyback program in 2022.

The CEO of United Rentals, Matthew Flannery, said, “Our 2022 guidance reflects the optimism of our customers, as well as our confidence in leveraging our competitive advantages over the longer term. Our larger, more diverse value proposition should both benefit the top line and strengthen our levers for delivering strong margins, cash generation and returns in this new upcycle.”

Outlook

For 2022, the company projects total revenue between $10.65 billion to $11.05 billion. Additionally, adjusted EBITDA is expected to be in the range of $4.95 billion to $5.15 billion.

Wall Street’s Take

The Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 4 Buys, 4 Holds and 1 Sell from the top analysts. The United Rentals stock price prediction of $394.11 implies 28.1% upside potential to current levels. Shares have increased 21.4% over the past year.

Blogger Opinion

TipRanks data shows that financial blogger opinions are 100% Bullish on URI, compared to the sector average of 72%.

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