United Rentals Earnings: Shares Fairly Valued After Recent Rise

United Rentals posted solid second-quarter results, including sales growth of 28% year over year and over 20 basis points of operating margin expansion. We raised our fair value estimate to $437 per share from $424 following the earnings release. The change is due to our stronger near-term sales and margin expectations following management’s raised guidance. The shares are now fairly valued, in our view. While the stock has experienced both upward and downward volatility year to date, the rental demand environment remains healthy. This is what gives us confidence to project over 21% sales growth in 2023, slightly above what United Rentals posted a year ago. We think strong demand will allow the company to maintain strong pricing and boost 2023 operating margin by 60 basis points to 28.4%.