Bernstein SocGen Group on Friday trimmed its price target for United Rentals (NYSE:URI) to $965.00 from $1,128.00 while retaining an Outperform rating on the equipment rental company. The stock was trading at $787.04 at the time of the latest data snapshot, and InvestingPro indicates it is modestly undervalued relative to its Fair Value estimate. Despite the cut in target price, the consensus analyst recommendation for URI stands at 1.83, a Buy signal on the commonly used scale.
The analyst revision follows United Rentals’ fourth-quarter results and outlook. Reported fourth-quarter EBITDA was 2% below Street expectations, and management’s 2026 EBITDA guidance came in about 1% under consensus. For the trailing twelve months, the company recorded EBITDA of $4.46 billion and revenue totaling $16.1 billion.
Bernstein highlighted investor reaction to those results, noting shares closed down roughly 13% as attention centered on persistent margin pressure across the business. Market participants are weighing whether the observed compression in profitability is a cyclical dynamic tied to the current environment or a more structural issue within the company’s cost and revenue mix.
InvestingPro flags that United Rentals is trading at a price-to-earnings ratio of 23.39 relative to near-term earnings growth, a valuation detail that may be amplifying investor scrutiny. The comprehensive Pro Research Report for URI is among more than 1,400 detailed analyses available to subscribers seeking deeper company-level insight.
Bernstein’s analysis attributes margin deterioration to a handful of specific drivers. Equipment rental margins declined by approximately 200 basis points over the past year despite growth in the business, with specialty operations responsible for about 85% of the total margin compression. The firm pointed to higher depreciation expense stemming from the Yak acquisition as one contributor. Additional pressures identified include increased delivery costs associated with more geographically dispersed mega projects and a faster expansion of lower-margin ancillary services, which have grown at about twice the rate of equipment rental revenue.
United Rentals’ reported fourth-quarter 2025 results also showed adjusted earnings per share of $11.09, below the consensus forecast of $11.78. Revenue for the quarter was $4.21 billion versus an anticipated $4.24 billion. In the wake of those results, RBC Capital reduced its price target on United Rentals to $1,041 from $1,123 but left an Outperform rating in place. RBC cited mixed earnings and continuing margin headwinds as reasons for the adjustment.
Taken together, the recent earnings miss, slightly lower-than-expected 2026 EBITDA outlook and analyst target reductions underline near-term uncertainty around United Rentals’ margin trajectory. Those developments have translated into heightened market sensitivity for the stock even as certain valuation and analyst consensus indicators remain supportive.
Key points
- Bernstein cut its price target on United Rentals to $965 from $1,128, keeping an Outperform rating.
- Q4 EBITDA came in 2% below expectations and 2026 EBITDA guidance was about 1% under consensus; trailing twelve-month EBITDA was $4.46 billion with $16.1 billion in revenue.
- Margin pressure - notably a 200 basis-point decline with specialty margins accounting for roughly 85% of the compression - is the central investor concern, driven by higher depreciation, delivery costs and faster growth in lower-margin services.
Risks and uncertainties
- Uncertainty over whether margin compression is cyclical or structural, affecting confidence in future profitability - relevant to construction and industrial equipment demand.
- Rising depreciation from acquisitions like Yak may continue to weigh on margins and earnings - a risk for capital-intensive businesses and equipment lessors.
- Expansion of lower-margin ancillary services could suppress overall profitability if it outpaces higher-margin equipment rental revenue - impacting pricing discipline in the rental and services segments.