Sunbelt Rentals Holdings, Inc.

J.P. Morgan reshuffled its ratings on major equipment-rental companies on Thursday, upgrading Herc Holdings to Overweight from Neutral with a December 2027 price target of $175 while downgrading United Rentals to Neutral from Overweight with a $1,170 target. Analyst Tami Zakaria also maintained an Underweight rating on Sunbelt Rentals but raised its December 2027 price target to $79 from a previous December 2026 target of $71, as the bank introduced its 2028 earnings forecasts. J.P. Morgan expects the Federal Reserve to raise interest rates once before the end of 2026, which could further postpone a recovery in smaller, locally driven construction markets, though elevated financing costs above 6% may push contractors to rent rather than buy equipment. The bank sees Herc Holdings as offering the most upside, citing improving fleet utilization after its acquisition of H&E Equipment Services, with projected 2026 adjusted EBITDA still about 10% below the combined companies' pre-transaction earnings, and forecasts Herc revenue rising from $5 billion in 2026 to $5.8 billion in 2028 with adjusted earnings reaching $15.11 a share in 2028. United Rentals remains the industry's best operator, but J.P. Morgan cited valuation and a shrinking acquisition pipeline, forecasting revenue of $17.8 billion in 2026, $19.4 billion in 2027 and $21.1 billion in 2028, with earnings projected at $63.35 a share in 2028. Sunbelt Rentals reported fiscal first-quarter adjusted earnings of $1.18 a share, beating the consensus estimate of $1.04, on revenue that rose 11% to $3.12 billion, and raised its adjusted EBITDA outlook to between $4.92 billion and $5.12 billion from a previous range of $4.85 billion to $5.05 billion.

Sunbelt Rentals Holdings Inc. raised its fiscal 2027 guidance for revenue growth, adjusted EBITDA, and capital expenditure after reporting record first-quarter results. The company now expects total revenue growth between 6% and 9%, up from the prior range of 4.5% to 7.5%, and adjusted EBITDA of $4.92 billion to $5.12 billion, compared with the earlier $4.85 billion to $5.05 billion. Gross capital expenditure guidance was lifted to $2.75 billion to $3.15 billion, with net rental capital expenditure between $2.4 billion and $2.8 billion. In the quarter, total revenue rose 11.2% to $3.1 billion, rental revenue grew 12.5% to $2.9 billion, and adjusted EPS increased 20.4% to $1.18 per share. Management cited strong demand across mega projects, energy, live events, and industrial nonconstruction MRO, and noted the completed integration of Aries into Sunbelt, which contributed about 100 basis points to rental revenue growth.

Sunbelt Rentals Holdings has appointed Cynthia T. Jamison to its Board of Directors as a non-executive director, effective August 1, 2026. Jamison currently serves on the boards of Advance Auto Parts, Darden Restaurants where she is chair, and International Flavors & Fragrances, and is a trustee and chair of the nominations and governance committee at Save the Children. She previously held CFO and interim executive roles at AquaSpy and Tatum LLC, and earlier in her career worked at Chart House Enterprises, Allied Domecq Retailing USA, Kraft General Foods, and Arthur Andersen. Sunbelt Rentals chairman Paul Walker said her financial expertise and governance leadership will strengthen the board as the company executes its Sunbelt 4.0 strategy.

Sunbelt Rentals outlined fiscal 2027 total revenue growth of 4.5% to 7.5% and rental revenue growth of 5% to 8%, while announcing the acquisition of Reliant Asset Management to create a 13th Specialty business line, Sunbelt Rentals Modular Solutions. CEO Brendan Horgan said the company delivered record fourth-quarter and full-year revenues of $2.8 billion and $11.2 billion, growing 8.9% and 3.4% respectively, with adjusted EBITDA of $4.7 billion and record free cash flow of $2.1 billion. CFO Alexander Pease guided adjusted EBITDA between $4.85 billion and $5.05 billion with broadly flat margins, and net rental equipment capital expenditures of $2.05 billion to $2.45 billion. The Reliant acquisition, operating as Aries, is expected to contribute about 1% to the fiscal 2027 guide but will be a margin drag in the first year due to a higher sales mix. Management expects margin improvement in the back half of the year, supported by operational excellence drivers and potential upside from dynamic customer pricing initiatives now active in 15 markets.