United Rentals Shares Decline Following Ashtead's Revenue Forecast Cut

In early trading on Tuesday, United Rentals shares fell by 5% following the announcement that its UK counterpart, Ashtead, downgraded its full-year rental income growth forecast for the U.S. market. Ashtead, which operates in a similar sector, revised its expected growth down from the previously forecasted range of 4-7% to 2-4%.

Ashtead's revision also included a less optimistic profit outlook, highlighting the challenges faced by the construction and equipment rental sectors during an uneven recovery process.

Despite the market's initial reaction, analysts at Evercore ISI expressed their support for United Rentals. They noted that United Rentals management had engaged in discussions with both Evercore ISI and Ashtead and were not surprised by Ashtead's comments. According to the analyst, the update from Ashtead is consistent with United Rentals' own expectations and guidance, indicating that it was "not a surprise" for United Rentals.

Currently, Ashtead's shares, which are traded in Europe, have experienced a significant decline of about 13%. The company also indicated its intention to move to a primary stock listing in the U.S. within the next 12 to 18 months.

Evercore ISI maintains a positive outlook on United Rentals, ranking it among their top five stock picks. Their investment perspective favors selective U.S. sectors over international ones, prioritizing U.S. transportation and short-cycle industries rather than agricultural and construction machinery.