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Is United Rental (URI) Set to Beat Earnings Estimates in Q1?
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We expect United Rentals, Inc. (URI - Free Report) to beat expectations when it reports first-quarter 2017 results after the closing bell on Apr 19. Last quarter, the company reported a positive earnings surprise of 16.09%. The company also surpassed expectations in each of the last four quarters, with the average beat being 12.75%. Let’s see how things are shaping up prior to this announcement.
Why a Likely Positive Surprise?
Our proven model shows that United Rentals is likely to beat earnings because it has the right combination of two key components.
Zacks ESP: United Rentals has an Earnings ESP of +3.27%. That is because the Most Accurate estimate is $1.58 while the Zacks Consensus Estimate is pegged lower at $1.53. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: United Rentals currently carries a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) have a significantly higher chance of beating earnings estimates. Conversely, stocks with a Zacks Rank #4 or 5 (Sell rated) should never be considered going into an earnings announcement.
The combination of United Rentals’ favorable Zacks Rank and positive ESP makes us reasonably confident of an earnings beat.
What is Driving the Better-Than-Expected Earnings?
United Rentals is one of North America's largest equipment rental companies with branches in the majority of the U.S. states and several Canadian provinces. Demand for United Rentals’ products is largely related to the performance of the broader construction sector. The company is well poised given the recent rally in the construction sector buoyed by the optimism surrounding President Donald Trump’s plans to spur economic growth through tax cuts and easier regulations.
Again, several recent statistics released related to the construction sector raise optimism. Construction spending inched up 0.8% on a monthly basis to $1,192.8 billion in February, at a seasonally adjusted rate. It also increased 3% on a year-over-year basis. Further, private and public sector construction expenditure increased a respective 0.8% and 0.6% on a monthly basis in February.
Importantly, a number of favorable U.S. indicators of 2017, comprising the Dodge construction outlook, contractor backlogs, national surveys by key trade groups, and importantly CEO confidence surveys add to the positives. IHS market, industry’s primary forecasting firm, projected 3% to 4% growth for the U.S. rental industry this year. Along with this, solid balance between supply and demand and positives like an improving economy, low unemployment levels, positive consumer confidence raise optimism about the sector’s performance in 2017. As such, demand for United Rentals’ products should also increase, thereby driving revenues.
However, one cannot ignore the ongoing drags from upstream oil and gas or weak Canadian economy and industry over fleeting.
For the first quarter, the Zacks Consensus Estimate for earnings stands at $1.53, reflecting a 9.5% year-over-year increase. Meanwhile, the estimate for revenues is pegged at $1.33 billion, implying 1.4% growth.
Here are some companies in the construction sector, that, according to our model, have the right combination of elements to post an earnings beat this quarter:
The company is expected to release quarterly results on May 10.
Louisiana-Pacific Corporation (LPX - Free Report) has an Earnings ESP of +27.59% and a Zacks Rank #1. The company is expected to release quarterly results on May 8.
Meritage Corporation (MTH - Free Report) has an Earnings ESP of +2.38% and a Zacks Rank #2. The company is slated to release quarterly results on Apr 27.
Sell These Stocks. Now.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500.
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Is United Rental (URI) Set to Beat Earnings Estimates in Q1?
We expect United Rentals, Inc. (URI - Free Report) to beat expectations when it reports first-quarter 2017 results after the closing bell on Apr 19. Last quarter, the company reported a positive earnings surprise of 16.09%. The company also surpassed expectations in each of the last four quarters, with the average beat being 12.75%. Let’s see how things are shaping up prior to this announcement.
Why a Likely Positive Surprise?
Our proven model shows that United Rentals is likely to beat earnings because it has the right combination of two key components.
Zacks ESP: United Rentals has an Earnings ESP of +3.27%. That is because the Most Accurate estimate is $1.58 while the Zacks Consensus Estimate is pegged lower at $1.53. A favorable Zacks ESP serves as a meaningful and leading indicator of a likely positive earnings surprise. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: United Rentals currently carries a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) have a significantly higher chance of beating earnings estimates. Conversely, stocks with a Zacks Rank #4 or 5 (Sell rated) should never be considered going into an earnings announcement.
The combination of United Rentals’ favorable Zacks Rank and positive ESP makes us reasonably confident of an earnings beat.
What is Driving the Better-Than-Expected Earnings?
United Rentals is one of North America's largest equipment rental companies with branches in the majority of the U.S. states and several Canadian provinces. Demand for United Rentals’ products is largely related to the performance of the broader construction sector. The company is well poised given the recent rally in the construction sector buoyed by the optimism surrounding President Donald Trump’s plans to spur economic growth through tax cuts and easier regulations.
Again, several recent statistics released related to the construction sector raise optimism. Construction spending inched up 0.8% on a monthly basis to $1,192.8 billion in February, at a seasonally adjusted rate. It also increased 3% on a year-over-year basis. Further, private and public sector construction expenditure increased a respective 0.8% and 0.6% on a monthly basis in February.
Importantly, a number of favorable U.S. indicators of 2017, comprising the Dodge construction outlook, contractor backlogs, national surveys by key trade groups, and importantly CEO confidence surveys add to the positives. IHS market, industry’s primary forecasting firm, projected 3% to 4% growth for the U.S. rental industry this year. Along with this, solid balance between supply and demand and positives like an improving economy, low unemployment levels, positive consumer confidence raise optimism about the sector’s performance in 2017. As such, demand for United Rentals’ products should also increase, thereby driving revenues.
However, one cannot ignore the ongoing drags from upstream oil and gas or weak Canadian economy and industry over fleeting.
For the first quarter, the Zacks Consensus Estimate for earnings stands at $1.53, reflecting a 9.5% year-over-year increase. Meanwhile, the estimate for revenues is pegged at $1.33 billion, implying 1.4% growth.
United Rentals, Inc. Price and EPS Surprise
United Rentals, Inc. Price and EPS Surprise | United Rentals, Inc. Quote
Stocks to Consider
Here are some companies in the construction sector, that, according to our model, have the right combination of elements to post an earnings beat this quarter:
TopBuild Corp. (BLD - Free Report) has an Earnings ESP of +2.86% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is expected to release quarterly results on May 10.
Louisiana-Pacific Corporation (LPX - Free Report) has an Earnings ESP of +27.59% and a Zacks Rank #1. The company is expected to release quarterly results on May 8.
Meritage Corporation (MTH - Free Report) has an Earnings ESP of +2.38% and a Zacks Rank #2. The company is slated to release quarterly results on Apr 27.
Sell These Stocks. Now.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500.
See today's Zacks "Strong Sells" absolutely free >>