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Investing.com - Stifel upgraded Custom Truck One Source (NYSE:CTOS) from Hold to Buy on Tuesday, while raising its price target to $7.00 from $5.00. The stock, currently trading at $5.15 with a market cap of $1.16 billion, has shown strong momentum with a 15.5% return over the past year. According to InvestingPro data, analysts maintain a bullish consensus with price targets ranging from $4.50 to $7.50.
The upgrade follows Stifel’s survey showing improved equipment availability trends in the second quarter of 2025. The survey revealed a net 2% of respondents saw tighter equipment availability in Q2 2025, compared to a net 14% who saw looser equipment availability in Q1 2025.
This marks a significant improvement from the second quarter of 2024, when a net 27% of respondents reported looser equipment availability. Stifel believes this year-over-year tightening in availability reflects improved rental utilization trends in the key Transmission and Distribution (T&D) market.
Stifel also expressed increased optimism about improved TES (Truck Equipment Sales) orders over the past two quarters, which further supports their more positive outlook on the company.
The research firm believes these combined trends help support earnings expectations for Custom Truck One Source, leading to the upgraded rating and higher price target.
In other recent news, Custom Truck One Source reported its first-quarter 2025 earnings, which did not meet analyst expectations. The company posted an adjusted earnings per share (EPS) of -$0.08, missing the forecasted -$0.06, and revenue of $422 million, which was below the projected $434.49 million. Despite this, Custom Truck One Source reaffirmed its full-year 2025 guidance, projecting revenue between $1.97 billion and $2.06 billion and adjusted EBITDA between $370 million and $390 million. Stifel analysts maintained a Hold rating on the company with a price target of $5.00, citing underperformance in the Truck and Equipment Sales (TES) segment as a concern. However, they noted that rental utilization increased to 77.7% year-over-year, reflecting positive trends in the Transmission and Distribution (T&D) market. The company’s TES orders grew significantly by 220% year-over-year to $284 million, aligning with their revenue guidance for 2025. Analysts from Stifel have adjusted their 2025 EBITDA estimates towards the lower end of the company’s guidance due to various challenges, including pricing pressures and new tariff-related cost impacts. Despite these hurdles, Custom Truck One Source continues to focus on strategic investments in its rental fleet to drive growth.
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