John Babcock, an analyst from Bank of America Securities, maintained the Sell rating on Hertz Global (HTZ – Research Report). The associated price target is $3.00.
John Babcock’s rating is based on Hertz Global’s 3Q:24 results, which fell short of forecasts after adjusting for asset impairment timing. The company’s adjusted EBITDA was lower than expected, and revenue was 2% below projections, although this was partially offset by reduced operating expenses. The Americas RAC segment reported worse-than-anticipated results, contributing to the overall negative outlook.
Moreover, Babcock expresses concerns about Hertz’s high free cash flow usage and anticipated leverage increase in 2025. The company is likely to lose market share as it tries to balance liquidity with the need to refresh its fleet. Additionally, Hertz’s potential return to the capital markets for liquidity, through increased debt, and plans for a smaller fleet in 2025 further support the Sell rating. These factors, combined with a revised valuation, underpin Babcock’s cautious stance on Hertz Global’s stock.
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Hertz Global (HTZ) Company Description:
Hertz Global Holdings Inc operates an automotive vehicle rental service through the Hertz, Dollar, Thrifty, and Firefly brands. The company offers cars, crossovers, and light trucks for rent; ancillary products and services; rental of industrial, construction, and material handling equipment; and fleet-leasing and fleet-management services. The company operates a network of car rental locations and licenses its brands to associates and franchisees. The highest segment by revenue is the U.S. car rental unit.
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