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Sunbelt Rentals Holdings Inc
(NYSE:SUNB)
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Rating:74Outperform
Price Target:
$82.00
▲(22.26% Upside)
Action:Upgraded
Date:09/15/26
SUNB scores well primarily on strong cash generation and solid profitability, supported by a very constructive earnings update including raised FY2027 guidance. The score is held back by meaningful leverage and currently mixed-to-weak technical momentum (negative MACD and price below key moving averages), with valuation only moderate at ~22x earnings and a low ~1% yield.
Positive Factors
Strong cash generation
Strong operating and free cash flow demonstrate effective conversion of rental earnings into internally generated funds. This supports fleet replacement, branch expansion, debt service and shareholder returns, while cash flow close to net income indicates that reported profitability is backed by operating economics.
Negative Factors
Elevated leverage
Although leverage has improved from earlier periods, the debt burden remains material relative to equity and increases financial sensitivity if rental demand weakens. Interest obligations and refinancing needs can constrain capital allocation, particularly while the company continues investing heavily in fleet and locations.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Strong operating and free cash flow demonstrate effective conversion of rental earnings into internally generated funds. This supports fleet replacement, branch expansion, debt service and shareholder returns, while cash flow close to net income indicates that reported profitability is backed by operating economics.
Read all positive factors
Sunbelt Rentals Holdings Inc (SUNB) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$30.76B
Dividend Yield1.4%
Average Volume (3M)6.70M
Price to Earnings (P/E)22.6
Beta (1Y)1.43
Revenue GrowthN/A
EPS GrowthN/A
CountryUS
Employees26,016
SectorGeneral
Sector StrengthN/A
IndustryRental & Leasing Services
Share Statistics
EPS (TTM)3.31
Shares Outstanding409,764,900
10 Day Avg. Volume4,890,707
30 Day Avg. Volume6,704,667
Financial Highlights & Ratios
PEG Ratio-1.80
Price to Book (P/B)4.31
Price to Sales (P/S)2.86
P/FCF Ratio9.31
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$86.40Price Target Upside28.82% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
EPS Forecast (FY)4.19
Revenue Forecast (FY)$12.10B
Sunbelt Rentals Holdings Inc Business Overview & Revenue Model
Company Description
Sunbelt Rentals Holdings Inc. operates as a prominent equipment leasing firm, furnishing an extensive array of tools, various machinery, and customized engineering solutions. Its clientele spans diverse sectors including construction, industrial a...
How the Company Makes Money
Sunbelt Rentals primarily makes money by renting equipment to customers for defined rental periods (e.g., daily, weekly, or monthly), generating recurring rental revenue based on equipment type, utilization, and time on rent. Revenue is also gener...
Sunbelt Rentals Holdings Inc Earnings Call Summary
Earnings Call Date:Sep 09, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Dec 08, 2026
Earnings Call Sentiment Positive
The call was strongly positive, with record first-quarter revenue, operating profit and EPS, broad-based demand, improving rates and utilization, strong Specialty growth, a raised fiscal 2027 outlook, and continued expansion opportunities. The main negatives were lower adjusted EBITDA margins, lower used-equipment sales, modest quarterly free cash flow, fuel-cost pressure and limited OEM capacity for certain high-demand equipment categories. Management remained confident in the business trajectory and long-term growth opportunities.Positive Updates
World-Class Safety Performance
The company reported a total recordable incident rate of 0.46 and a lost time rate of 0.14 for the quarter, supported by its Engage for Life safety culture.
Negative Updates
Adjusted EBITDA Margin Decline
Adjusted EBITDA increased 8.7% to $1.3 billion, but the margin declined to 42.2% from 43.2% in the prior-year quarter. Management attributed roughly three-quarters of the year-over-year margin change to higher relative growth in ancillary revenue, partially offset by rate improvement.
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Q1-2027 Updates
Positive
Negative
World-Class Safety Performance
The company reported a total recordable incident rate of 0.46 and a lost time rate of 0.14 for the quarter, supported by its Engage for Life safety culture.
Read all positive updates
Company Guidance
For fiscal 2027, Sunbelt Rentals raised guidance to total revenue growth between 6% and 9%, rental revenue growth between 7% and 10%, adjusted EBITDA of between $4.92 billion and $5.12 billion, with full year margins expected to be broadly consistent with the prior year, gross capital expenditure guidance between $2.75 billion to $3.15 billion, and net rental capital expenditure guidance between $2.4 billion and $2.8 billion; the company continues to expect strong free cash flow generation throughout the year, expects to open approximately 55 greenfield locations, anticipates depreciation to grow compared to the 2.5% as it progresses sequentially through the quarter, expects time utilization to be more stable as it goes through the year rather than show significant upside, and said that continued acceleration in the rate environment would represent upside to the guide.Sunbelt Rentals Holdings Inc Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
67
Positive
Cash Flow
83
Very Positive
| Breakdown | TTM | Apr 2026 | Apr 2025 | Apr 2024 | Apr 2023 | Apr 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 11.47B | 11.15B | 10.79B | 10.86B | 9.67B | 7.96B |
| Gross Profit | 5.12B | 4.29B | 9.50B | 9.65B | 8.56B | 7.02B |
| EBITDA | 4.22B | 4.50B | 5.00B | 4.89B | 4.41B | 3.56B |
| Net Income | 1.38B | 1.32B | 1.51B | 1.60B | 1.62B | 1.25B |
Balance Sheet | ||||||
| Total Assets | 23.61B | 22.27B | 21.69B | 21.65B | 18.73B | 15.29B |
| Cash, Cash Equivalents and Short-Term Investments | 32.00M | 29.00M | 21.00M | 20.80M | 29.90M | 15.30M |
| Total Debt | 12.68B | 10.16B | 10.35B | 10.68B | 8.99B | 7.18B |
| Total Liabilities | 16.17B | 14.86B | 14.02B | 14.57B | 12.72B | 10.26B |
| Stockholders Equity | 7.45B | 7.41B | 7.67B | 7.08B | 6.01B | 5.03B |
Cash Flow | ||||||
| Free Cash Flow | 3.69B | 3.43B | 1.72B | 169.00M | 490.10M | 1.10B |
| Operating Cash Flow | 4.03B | 3.78B | 2.17B | 854.60M | 1.00B | 1.50B |
| Investing Cash Flow | -3.24B | -1.93B | -541.80M | -1.53B | -1.59B | -1.69B |
| Financing Cash Flow | -773.70M | -1.85B | -1.63B | 663.20M | 609.30M | 181.50M |
Sunbelt Rentals Holdings Inc Peers Comparison
UnderperformOutperform
Sector (55)
SUNB
Sunbelt Rentals Holdings Inc
74.89
2.16
2.96%
IX
Orix
39.03
12.49
47.06%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.