UPDATE: Morgan Stanley Reiterates On United Rentals Following Analyst Meeting

In a report published Friday, Morgan Stanley analyst Nicole DeBlase reiterated an Equal-Weight rating on United Rentals (NYSE: URI), and raised the price target from $122.00 to $131.00.

In the report, Morgan Stanley noted, “We are attracted to URI's 50% exposure to US Non-Residential Construction, our preferred end market within the Machinery space. However, we believe that as visibility into Non-Resi project activity improves, construction companies will opt to buy more equipment (over renting). Moreover, we see indirect risk to Non-Resi growth stemming from lower commodity prices. The recent National Pump acquisition is expected to add 10% to EPSin 2014-15e, and we expect management to continue to expand into the Specialty Rentals market via M&A (as per guidance for $1bn revenue contribution over time). We acknowledge the propensity for URI to generate $2.5b in FCF over the next 3 years and buyback $750m in shares over the next 18 months.”

United Rentals closed on Thursday at $113.35.