DCF Studio

    URI · NYQ · Industrials

    United Rentals, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 537.55

    Market price

    USD 1175.42

    Implied upside

    -54.3%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedCapital expenditure runs at 28.8% of revenue against depreciation of 19.2%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 537.55-54.3%
    Exit multiple
    USD 1195.67+1.7%
    Market price
    USD 1175.42

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn3bn5bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 18.1bnUSD 20.0bnUSD 21.9bnUSD 23.7bnUSD 25.5bnUSD 27.1bnUSD 28.6bnUSD 29.9bnUSD 30.9bnUSD 31.7bn+6.4%
    EBITUSD 4.8bnUSD 5.3bnUSD 5.8bnUSD 6.3bnUSD 6.7bnUSD 7.2bnUSD 7.6bnUSD 7.9bnUSD 8.2bnUSD 8.4bn+6.4%
    NOPATUSD 3.8bnUSD 4.2bnUSD 4.6bnUSD 5.0bnUSD 5.3bnUSD 5.7bnUSD 6.0bnUSD 6.2bnUSD 6.5bnUSD 6.6bn+6.4%
    Add depreciation & amortisationUSD 3.5bnUSD 3.8bnUSD 4.2bnUSD 4.5bnUSD 4.9bnUSD 5.2bnUSD 5.5bnUSD 5.7bnUSD 5.9bnUSD 6.1bn+6.4%
    Less capital expenditureUSD -5.2bnUSD -5.6bnUSD -6.0bnUSD -6.4bnUSD -6.7bnUSD -6.9bnUSD -7.1bnUSD -7.2bnUSD -7.3bnUSD -7.2bn+3.7%
    Capex, % of revenue28.8%28.1%27.5%26.8%26.1%25.5%24.8%24.2%23.5%22.8%-
    Less increase in working capitalUSD -223.6mUSD -211.7mUSD -211.5mUSD -207.2mUSD -198.3mUSD -184.8mUSD -166.6mUSD -143.9mUSD -117.1mUSD -86.8m-10.0%
    Free cashflow to firmUSD 1.8bnUSD 2.2bnUSD 2.5bnUSD 2.9bnUSD 3.4bnUSD 3.8bnUSD 4.2bnUSD 4.6bnUSD 5.0bnUSD 5.4bn+12.8%
    Discount factor0.95270.86470.78490.71240.64660.58690.53270.48350.43880.3983-
    Present valueUSD 1.7bnUSD 1.9bnUSD 2.0bnUSD 2.1bnUSD 2.2bnUSD 2.2bnUSD 2.2bnUSD 2.2bnUSD 2.2bnUSD 2.1bn-
    Present Value Of The ForecastUSD 20.9bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.541Reported 1.808, pulled toward 1.0 (Blume)
    Cost of equity11.41%Risk-free + beta x equity risk premium
    Cost of debt5.59%Risk-free + 70bp, the spread for a A+ rating at 5.6x interest cover. Book interest / average debt was lower, at 4.7%.
    Market capitalisationUSD 72.8bn82.3% of capital
    Total debtUSD 15.7bn17.7% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC10.17%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 537.55

    58% of EV

    Forecast FCFF, final year
    USD 5.4bn
    Capex at depreciation, working capital in reinvestment
    USD 6.6bn
    Less reinvestment at g/ROIC (17.6% of NOPAT)
    USD -1.2bn
    Capitalised
    USD 5.5bn
    ROIC (reported)
    14.2%
    Terminal value, undiscounted
    USD 72.9bn
    Terminal value, discounted
    USD 29.1bn
    Enterprise value
    USD 49.9bn
    Less net debt
    USD 15.2bn
    Equity value
    USD 34.7bn

    Exit at 12.4x EBITDA

    Value per shareUSD 1195.67

    77% of EV

    Terminal value, undiscounted
    USD 179.7bn
    Terminal value, discounted
    USD 71.6bn
    Enterprise value
    USD 92.5bn
    Less net debt
    USD 15.2bn
    Equity value
    USD 77.2bn

    Spread between methods: 76%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    8.17%800.76820.14844.30874.62913.08
    9.17%648.42656.76667.45681.06698.35
    10.17%532.19534.28537.55542.24548.67
    11.17%440.81439.27438.31438.03438.57
    12.17%367.24363.57360.16357.06354.33

    Outlined: this model. Green text: above today's price of 1175.42. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year11.4%7.0%14.6%
    EBIT margin27.8%26.5%44.9%
    Discount rate-10.2%6.9%
    Download as Excel

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    Yahoo Finance and RBA data. General information, not advice. Methodology.