URI – Market expectations are for Uniform ROA to decline, but management is confident about market recovery, ROIC, and spending

September 15, 2020

  • United Rentals, Inc. (URI:USA) currently trades below corporate averages relative to UAFRS-based (Uniform) earnings, with a 17.6x Uniform P/E. At these levels, the market has bearish expectations for the firm, but management is confident about industrial market recovery, ROIC sustainability, and spending flexibility

  • Specifically, management generated an excitement marker when stating companies may increase travel expenses if the country continues to open up. Furthermore, they are confident that this recession is not as bad as in 2009, and that they do not need any more workers. They are also confident in the industrial market recovery, and the sustainability of their ROIC remaining above cost of capital. Additionally, they are confident they have flexibility in spending