Credit Suisse Reinstates Hertz At Outperform, Sees Huge Capital Return Opportunity

In a report published Monday, Credit Suisse analyst Anjaneya Singh reinstated coverage of Hertz Global Holdings Inc (NYSE: HTZ) with an Outperform rating and a price target of $23, after the company completed its financial restatement and provided its FY15 guidance.After filing its 2014 10-K and 10-Q for 1Q15 on July 16, the company can now focus on "getting back to full operating strength," analyst Anjaneya Singh said. "We look towards the management team making progress on the targeted cost saves this year and next, executing on the DTG integration later this year, and completing the HERC spin by mid-2016," Singh added.Hertz reaffirmed its $1bn share buyback program, and reiterated its commitment to separating HERC, expected in 2Q16. "While relatively less significant and not as well broadcasted, HTZ's investment in China Auto Rental could also be unwound and the Donlen business divested," the Credit Suisse report stated.Singh estimates these parts to result in proceeds of as much as $1.2bn. "We size the total capital freed up through repurchases and portfolio optimization at over $5bn."Singh also believes that the details shared by the company regarding its performance improvement plan during the November analyst day "could serve to be an important catalyst for HTZ."