BREAKING: Futures Fall After S&P 500 Rises To Resistance

United Rentals (URI) is approaching a buy point of 415.09 in a long consolidation base. The equipment rental stock is benefiting from the $1.2 trillion infrastructure spending bill that came into effect in November 2021. MarketSmith shows the relative strength line for the stock at a 52-week high, indicating superior performance compared to the S&P 500.

The equipment rental stock is now approaching the November 2021 peak, when the long basing pattern started. Shares bottomed out in June 2022 and reclaimed the 10-week moving average in October, remaining solidly above it into January.

The Big Cap 20 stock has a perfect 99 Composite Rating while the Relative Strength Rating of 95 confirms the strong technical profile. The RS Rating has improved dramatically over the past six months.

URI stock's 96 EPS Rating is even more remarkable in an environment when earnings are getting slashed. The firm has delivered double-digit earnings growth in the most recent quarters.

In the third quarter, United Rentals sales grew 18% to $3 billion while earnings of $9.27 per share marked 41% year-over-year growth. Cash flow from operations rose 5.3% from the previous year while free cash flow fell 9.1% to $1.14 billion due to higher rental and non-rental equipment purchases.

The equipment rental giant also increased the low end of its full-year outlook, now expecting $11.4-$11.7 billion in sales, up from the earlier range of $11.1-$11.7 billion.

The Stamford, Conn. company is set to report fourth quarter and full-year results on Jan. 26.

URI ranks first among peers in the Commercial Services-Leasing group, which holds a lofty No. 6 position among IBD's 197 industry groups. Other group members include McGrath RentCorp (MGRC) and H&E Equipment Services (HEES).

The Biden administration's Infrastructure Investment and Jobs Act directs $110 billion toward rebuilding roads and bridges, $39 billion to modernize public transportation and $66 billion for passenger and freight rail. $17 billion is slotted for port restoration while $25 billion will strengthen airport infrastructure, according to reports. United Rentals stands to benefit directly from the broad range of these plans.

With nearly 1,500 locations worldwide, United Rentals provides rental equipment to construction and industrial customers as well as utilities, municipalities and homeowners. It has a presence in North America, Europe, Australia and New Zealand. The equipment rental giant offers a wide range of products that include forklifts, loaders, excavators, cranes, hoists, HVAC, pumps, tanks, trucks, trailers, power and hand tools.

In December 2022, URI acquired Ahern Rentals for $2 billion in cash. The deal added 106 locations and 60,000 rental assets to the company's portfolio.

Mutual funds own 54% of the stock. URI's Accumulation/Distribution Rating of "B-" also shows good interest in the stock from institutional investors.

Several exchange traded funds hold the stock as well. The First Trust Nasdaq Transportation ETF (FTXR) and the Argen Mid Cap ETF (AMID) currently have positions.

Please follow VRamakrishnan @IBD_VRamakrishnan for more news on growth stocks.

Looking For The Next Big Stock Market Winners? Start With These 3 Steps

Want More IBD Insights? Subscribe To Our Investing Podcast

Get Free IBD Newsletters: Market Prep | Tech Report | How To Invest

What Is CAN SLIM? If You Want To Find Winning Stocks, Better Know It

IBD Live: Learn And Analyze Growth Stocks With The Pros

After enduring a painful bear market in stocks in 2022, investors are searching for signs of what's to come in 2023. (© Gary Neill)

1/03/2023 Does the 2023 stock market forecast hold any hope for the battered S&P 500, Dow Jones or other stocks? Maybe....

1/03/2023 Does the 2023 stock market forecast hold any hope for...

Get instant access to exclusive stock lists, expert market analysis and powerful tools with 2 months of IBD Digital for only $20!

Get market updates, educational videos, webinars, and stock analysis.

Learn how you can make more money with IBD's investing tools, top-performing stock lists, and educational content.

Notice: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. The information has been obtained from sources we believe to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the stocks they discuss. The information and content are subject to change without notice.

*Real-time prices by Nasdaq Last Sale. Realtime quote and/or trade prices are not sourced from all markets.

Ownership data provided by Refinitiv and Estimates data provided by FactSet.

© 2000-2023 Investor's Business Daily, LLC. All rights reserved