United Rentals Earnings: Solid Growth in General and Specialty Rental Enables Confirmed Guidance

United Rentals' second quarter looked solid to us with revenue growth in all areas except equipment sales that continue to normalize off artificially high pricing in 2022 and 2023. Revenue, adjusted EBITDA, and EPS were all records and adjusted EPS of $10.70 grew 8.3% year over year. We are raising our fair value estimate to $575 from $569 on the time value of money since our last update. Total revenue increased 6.2% to $3.8 billion with rental making up 85% of total sales and that segment growing 7.8%. Fleet productivity, a utilization measure, increased 4.6% and by 3% excluding the Yak acquisition closed on March 15. Management sounds optimistic about a strong second half of the year and cited particularly strong demand by customers for large projects. The company’s size and breadth with leading share of 15%, over 1,600 global branches, and about 4,800 equipment categories should help it win lots of business for these types of deals, especially for the specialty business that focuses on larger projects.