UPDATE: Morgan Stanley Downgrades Hertz Global Holdings to Underweight on Used Car Pricing Headinds
Morgan Stanley downgraded Hertz Global Holdings (NYSE: HTZ) 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.
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Tags: Morgan Stanley