What Happened?
Shares of equipment rental company United Rentals (NYSE:URI) jumped 5.3% in the pre-market session after the company announced it would acquire H&E Equipment Services (HEES) for $92 per share in cash, valuing the deal at approximately $4.8 billion, including $1.4 billion in net debt.
This acquisition is expected to strengthen United Rentals' "grow the core" strategy by adding nearly 64,000 units to its rental fleet and expanding its reach in key U.S. markets. By using H&E's branch network and skilled workers, United Rentals plans to cross-sell specialty rental services, aiming for $130 million in annualized cost savings within two years and $120 million in annual revenue synergies from cross-selling by the third year. Finally, the deal is expected to immediately increase earnings and free cash flow within the first year upon closing.
Is now the time to buy United Rentals? Access our full analysis report here, it’s free.
What The Market Is Telling Us
United Rentals’s shares are somewhat volatile and have had 10 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 2 months ago when the stock gained 11.4% after stocks rallied as Republican party candidate Donald Trump was declared the winner of the 2024 US presidential election. For industrials stocks, President-elect Trump is considered more pro-business and a defender of American industrial interests. This could generally lead to a more robust capital expenditures and investment environment.
United Rentals is up 5% since the beginning of the year, but at $724.45 per share, it is still trading 17.7% below its 52-week high of $880.32 from November 2024. Investors who bought $1,000 worth of United Rentals’s shares 5 years ago would now be looking at an investment worth $4,694.
Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.