After you receive this Alert, we will buy 80 shares of United Rentals (URI) at or near $256. Following the trade, URI will account for roughly 2.5% of the portfolio.
We are adding to the portfolio's position in United Rentals on the back of better-than-expected numbers in the latest Durable Goods Order report as well as favorable forward data in the most recent ABA Architectural Billings Index that should translate into billings as the cadence of Biden Infrastructure Law spending accelerates. As of mid-May, roughly $79 billion had been announced for grant and program funding for highway, rail, and port infrastructure, but given inflationary pressures since the start of the year, we have to recognize the positive impact will be less than thought back in late 2021.
Odds are projects will be scaled back some versus original expectations, which more than likely will translate into reduced time demand over rented equipment. This is prompting us to dial back our URI price target to $380 over the coming 12-24 months, which still offers ample upside potential for us to maintain our One rating. We continue to think that if the domestic economy dips into a recession, efforts will be made to accelerate Biden infrastructure spending to help lift the economy back onto its feet.
United Rentals Weekly Chart Remains Constructive
(Please note that we are looking to execute these trades at or near the share price mentioned above. Once the trade is completed, subscribers can see the trade's executed price here. Be sure to toggle the chart to sort by Purchase Date.)