UPDATE: Morgan Stanley Downgrades Hertz Global Holdings to Underweight on Used Car Pricing Headinds

Morgan Stanley downgraded Hertz Global Holdings

from Overweight to Underweight and raised the price target from $17.00 to $18.00. Morgan Stanley commented, "In conjunction with our upgraded 2013 US SAAR estimate of 16m units we take a more cautious view on the outlook of used car prices due to: (1) greater supply of used units; (2) higher sub-prime new car loan approvals; (3) the potential return of some ‘bad behavior' by the OEMs on new car pricing. We note that US housing starts have a negative 62% correlation with Manheim. Manheim has been 77% correlated with HTZ rent-a-car (RAC) EBITDA since 2008. We expect a 4% fall in used prices in 2013." Hertz Global Holdings closed at $17.35 on Wednesday.