Risk highest for United Rentals after Ashtead guidance cut, says Baird

Baird says Ashtead Group (ASHTY) cut both its rental revenue and capex guidance below prior ranges on the soft U.S. local market. A slowing rental demand environment is “increasingly clear at this point, with further pressure likely as 2025 progresses,” the analyst tells investors in a research note. Ashtead’s lowered guidance reflects the reality of a slowing demand environment while equipment supply to the market continues increasing, adds Baird. The firm says the risk is highest at United Rentals (URI), given the softening fundamentals coupled with its “elevated valuation.” It believes Herc Holdings (HRI) should experience pressure as well but notes the stock trades a “sizable valuation discount” versus United Rentals, which “provides some buffer.” Access equipment pressure should continue for Oshkosh (OSK) and Terex (TEX), says Baird, which continues to view Oshkosh as better positioned in the near-term.