Goldman Sachs Boosts Sunbelt Rentals to Buy on Strong Earnings
Goldman Sachs has upgraded its rating for Sunbelt Rentals to 'buy' from 'neutral', citing strong first-quarter results that exceeded expectations. The company's revenue grew 5.8% over the last twelve months to $11.47 billion, with analysts projecting earnings per share (EPS) of $4.07 for fiscal year 2027.
The upgrade is based on Goldman Sachs' forecast of strong top-line growth, with approximately 10% organic rental revenue growth expected in fiscal year 2027. The firm also expects margin recovery. With shares currently trading at $72.35, the price target of $93 implies a potential 29% upside.
The upgrade follows Sunbelt Rentals' record first-quarter fiscal 2027 results, with adjusted earnings of $1.18 per share on revenue of $3.12 billion. The company's strong performance has also led to an increase in full-year guidance for revenue, adjusted EBITDA, and capital spending.
The upgrade is not without dissenting views, however. BofA Securities raised its price target to $71 from $62 while maintaining an Underperform rating, citing revised earnings estimates, currency effects, and higher net debt.