United Rentals, the leading equipment-rental company, experienced a significant surge in stock on Thursday following its optimistic revenue guidance and announcement of increased shareholder returns.
According to FactSet, United Rentals expects its fiscal 2024 revenue to be between $14.7 billion and $15.2 billion, surpassing its fiscal 2023 revenue of $14.3 billion and exceeding analysts’ estimated revenue of $14.2 billion.
Shares of United Rentals witnessed an impressive rise of 13%, reaching $649.50. This surge not only brought the stock close to its record high but also marked its most substantial increase since April 2020, as reported by Dow Jones Market Data. In fact, United Rentals emerged as one of the top performers in the S&P 500, which experienced a modest 0.4% rise on Thursday.
For the fourth quarter, United Rentals reported earnings amounting to $11.26 per share on revenue totaling $3.7 billion. This performance exceeded the expectations of analysts surveyed by FactSet who projected earnings of $10.76 per share on revenue of $3.6 billion.
The company announced that its rental revenue for the quarter experienced a remarkable year-over-year increase of 13.5%, amounting to a fourth-quarter record of $3.119 billion. This growth highlights the overall robust demand witnessed across United Rentals’ various end-markets.
Furthermore, United Rentals plans to repurchase $1.5 billion worth of common stock in 2024, showcasing its confidence in the company’s future growth potential. Additionally, the company has decided to raise its quarterly dividend by 10% to $1.63 per share, further demonstrating its commitment to rewarding its shareholders.
Stifel analyst Stanley Elliott expressed his confidence in United Rentals’ performance and outlook, stating, “We are encouraged by the results and outlook and continue to believe URI is well positioned to outgrow peers and end markets going forward.” Elliott rates the stock as a Buy and has set a price target of $591.
