As we approach the midpoint of 2024, the industrial sector is witnessing a resurgence in activity, driven by the boom in construction amid rising demand. The American Rental Association (ARA) projects 7.1% revenue growth for the construction rental equipment segment in 2024, following an 11.3% jump in 2023. With an expected surge in infrastructure spending and residential construction projects driving demand, companies are expanding to meet customer needs in key markets.
Within the group, United Rentals (URI) stands out as one top investment pick. Analysts at JPMorgan recently gave URI an "Overweight" rating with a $780 price target, suggesting potential upside of more than 24% from current levels. In naming URI its top U.S. construction play, JPMorgan (JPM) says the company's scale is a major bonus that positions United Rentals for above-industry returns, with benefits like “increased bargaining power with suppliers, network effects, high switching costs for customers, and barriers to entry for new, smaller competitors.”
