In a report published Wednesday, J.P. Morgan analyst Kevin Milota downgraded the rating onHertz Global
from Overweight to Neutral. In the report, J.P. Morgan noted, “We are downgrading our rating on HTZ to Neutral from Overweight following the company's 8-K filing last night. The filing contained a bundle of bad news that we believe will be the point of capitulation for many of the frustrated bulls who have been extremely patient with HTZ until this point (as it has yet to print 1Q & 2Q results due to its financial statement review that began in May 2014). "In the 8-K HTZ announced 1) it is withdrawing its 2014 guidance (and will be well below the low end of its previous guidance); 2) 2Q14 headline results were lackluster with revenues coming in below our/Street's estimates; 3) its Rental Car Group President and Lead Independent Director retired; and 4) it potentially delayed the spin of its equipment rental business past 1Q15 (a major catalyst for investors looking for the rental car business recapitalization). "We, and believe many of the bulls, have lower confidence in HTZ's ability to manage through the accounting/financial statement review while concurrently participating in the rental car operating fundamental upswing that its primary competitor CAR has seen to date.” Hertz Global closed on Tuesday at $31.56.
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