Best Stocks to Buy on the Dip: URI Stands Out Before Earnings

The S&P 500 and the Nasdaq hit new highs again on Monday as Wall Street celebrates the upbeat opening to second-quarter earnings season.

Market-moving large-cap companies are beating subdued estimates, dragged down by initial tariff and trade war concerns. More importantly, management commentary about current business trends have been very favorable, helping firm up earnings expectations for the third quarter and beyond.

The improving earnings outlook, coupled with projections that the Fed will lower rates again in the second half of the year, provides a bullish runway that extends far beyond July.

The market-crushing large-cap stock we explore today could be ready for a breakout after earnings, while also providing long-term investors value and diversification in the technology-heavy market.

Buy URI Stock for Value, Growth, and Breakout Potential

United Rentals (URI) is an equipment rental giant, providing a vast fleet of construction and industrial equipment throughout North America, Europe, and beyond.

The company is set to release its second quarter earnings results after the closing bell on Wednesday, July 23.

URI stock has soared 1,100% in the past decade to quintuple (5X) both the Zacks Construction Sector and the S&P 500, as part of a larger blockbuster run off its financial crisis lows.

United Rentals benefits from the ongoing investment super cycle across energy infrastructure, manufacturing/ reshoring, and more. Its huge outperformance remains firmly intact in the past several years as well, up 73% vs. the benchmark’s 40%.

Yet, investors can buy United Rentals stock 13% below its November highs, and at a 6% discount to Construction and 22% below the S&P 500 at 17.6X forward earnings.

The industrial and construction standout fell to its 21-day moving average on Monday after failing to break out above its pre-December selloff levels earlier this month. Traders might step in soon, with any further drop to its 50-day or 200-day, likely offering long-term investors a solid buying opportunity. Wall Street also already washed away URI’s selloff between mid-February and the market’s April bottom after it was outbid for H&E by industry rival Herc Holdings (HRI).

URI’s growing portfolio of large equipment includes scissor lifts, towable light towers, generators, excavators, and nearly everything else under the sun. Customers across construction, utilities, energy, and beyond count on United Rentals for various needs across an array of timeframes. 

Beyond renting (and selling) equipment, it offers related solutions and services to its customers in critical industries such as AI-heavy data centers, power generation & distribution, renewable energy, and more.

URI averaged 16% revenue growth and 36% GAAP earnings expansion in the past four years. The company is projected to slow down to the tune of 4% sales growth in 2025 and 5% next year, following its huge run.

United Rentals is projected to edge out 1% earnings expansion this year and 10% higher next year, and its upward EPS revisions earn it a Zacks Rank #2 (Buy) right now.

The nearby chart highlights United Rentals’ long-term earnings growth outlook. On top of its breakout potential, United Rentals pays a dividend and announced a new $1.5 billion share repurchase program last quarter.

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This article originally published on Zacks Investment Research (zacks.com).

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