New United Rentals Price Target After Beat-And-Raise Report

We are taking our price target for United Rentals (URI) to $1,250 from $1,100 and lifting our checkpoint level for the shares to $930 from $865. We are making this move following the company’s beat-and-raise Q2 2026 reported on Wednesday night and bullish comments by the management team delivered on Thursday morning’s earnings conference call. Also influencing this move are comments made during CSX’s (CSX) Q2 2026 earnings call on Wednesday night about what is driving demand for its rail and truck services:

“Steady construction activity continues to support minerals and metals, and investment tied to power infrastructure and data center build-out is driving demand…“

Building on CSX’s comments, on Thursday morning Union Pacific (UNP) shared its Q2 2026 results benefitted from industrial volume growth. Moreover, like CSX, Union Pacific sees that continuing given a strong industrial pipeline, plant expansions, data center construction and re-shoring activity. That points to demand for United Rentals’ equipment fleet remaining strong, which explains why the company lifted its capex target for this year.

As the seasonally strong time of year for construction activity continues, fleet productivity at United should remain elevated, which should also bode well for incremental pricing action. Those conditions should remain intact for most of H2 2026, unless we fall prey to earlier-than-usual winter weather. Our focus will remain on the larger data center construction, re-shoring activity and power buildout that should span multiple years of activity.

While that keeps us bullish on URI shares over the longer-term, we’ll continue to watch the intensity of inflation tailwinds and what that may mean for interest rates and project borrowing costs. In the near-term, if the market becomes convinced the Fed may need to do more to tame inflation, that would likely weigh on URI shares. That may trigger some prudent maneuvering with the Portfolio’s position, which means we will remain focused what the incoming data tells us.

By the Numbers

United reported second-quarter revenue of $4.41 billion, ahead of analysts’ consensus estimate of $4.21 billion with EPS of $12.76 easily exceeding the consensus forecast of $11.59. Rental revenue climbed 12.7% from a year earlier to a record $3.85 billion, helped by a 3.4% increase in fleet productivity and continued strength in demand across large construction and industrial projects.

United increased its 2026 revenue outlook to $17.5 billion to $17.8 billion, up from its previous forecast of $16.9 billion to $17.4 billion. And, given the market mood and emphasis on guidance relative to market expectations, we’d note that new range is above the Wall Street consensus estimate of $17.26 billion for 2026. United also lifted its adjusted EBITDA forecast to $7.975 billion to $8.125 billion, up from $7.625 billion to $7.875 billion. And that spurred an increased operating cash flow forecast to $5.85 billion to $6.65 billion, from $5.4 billion to $6.2 billion.

That should easily fund higher equipment capex while still offering ample firepower to meeting the company’s share repurchase target of $1.5 billion in 2026. In the first half of 2026, United completed $750 million in share repurchases. The growing prospect for that target to be hit along with raised adjusted EBITDA expectations should translate into higher EPS forecasts across Wall Street, which also means we probably won’t be alone in lifting our URI price target.

Quick Word on Paccar Shares

As long as we’re mentioning comments from CSX, we’ll also share the following, which was also shared during Wednesday night’s earnings call:

“Our opportunities to convert business to the railroad continue to grow as tighter truck supply and higher rates are highlighting the value proposition of rail.“

While tight truck capacity is a likely positive for rail pricing, it’s also a pain point that should drive new truck demand, especially ahead of looming new EPA regulations that go into effect in H1 2027. And because rail does not deliver directly to construction sites, we see the demand driving equipment rental demand also fostering tight truck supply. Nice positives for the Portfolio’s position in Paccar (PCAR) shares.

Paccar will report its Q2 2026 results on July 28.

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At the time of publication, TheStreet Pro was long PCAR and URI shares.