United Rentals Inc (URI) fell by over 6% after investors were spooked by a reported 1.4% drop in rates and overlooked a record breaking 1.90% increase in Q1 utilisation to 66%.
The drop seems too harsh as the overall results were a top and bottom line beat with revenue growth of 3.5% and adjusted EPS of $1.63 comparing favorably to $1.40 last year and consensus estimates of $1.55.
Michael Kneeland, chief executive officer, said that the growth was driven by strength in the core construction markets and added that positive trends in upstream oil and gas and that “the tone of conversations with our customers” were encouraging.
The company raised guidance to include the acquisition of NES Rentals earlier this month. Analysts expect EPS of $9.35 for the current year which would be a multiple of 12 times yesterday’s aftermarket price of $111.90.
With record utilization rates, top and bottom line beats and positive news regarding the economy, construction and oil and gas the current valuation looks too cheap.
This is not a recommendation to buy or sell. Stocks not suitable for all investors. Please consult your advisor and do your own research.
Submitted April 23, 2017 at 02:49PM by InterestingNews1 http://ift.tt/2pU7Z6K
