Market Overview

Biggest Risk To The Bear Thesis On Hertz? Carl Icahn

Biggest Risk To The Bear Thesis On Hertz? Carl Icahn

Shares of Hertz Global Holdings, Inc (NYSE: HTZ) were trading lower by nearly 4 percent early Friday morning after analysts at Credit Suisse downgraded the stock to Underperform from Neutral with a price target lowered to $15 from a previous $27.

Credit Suisse's Anjaneya Singh noted that his downgrade is mostly due to a concerning update from Hertz's peer Avis Budget Group Inc. (NASDAQ: CAR),which "presents a negative read-through" for Hertz.

Specifically, Avis Budget reported on Thursday a top- and bottom-line miss in its fourth-quarter report and guided its full-year fiscal 2017 revenue to a range below consensus estimates. Moreover, Avis Budget reported a 1 percent decrease in its Americas volume and 1–2 percent volume growth guidance.

Related Link: Benzinga's Option Alert Recap From February 15

Singh did, however, note that Hertz could grow its volumes at a faster pace than its rival, but the higher growth could come at the expense of pricing, which serves as a net detriment to its EBITDA growth.

"In an environment that presents weak volume growth, flattish pricing, and inflationary fleet costs, we see HTZ struggling to generate profit growth reflected in consensus estimates," Singh wrote.

Short Sellers Be Warned

Singh cautioned there is a risk to his bearish thesis: billionaire activist investor and Hertz's largest shareholder Carl Icahn, whose stake in the company is north of 30 percent.

The analyst believes Icahn could be tempted to take Hertz private if the stock continues to show weakness.

At last check Friday morning, shares of Hertz were down 5.54 percent at $20.46.

Image Credit: By Farhan from Karachi, Pakistan (Faisalabad Hertz) [CC BY 2.0 (], via Wikimedia Commons

Latest Ratings for CAR

Jul 2020Morgan StanleyMaintainsOverweight
Jul 2020Deutsche BankMaintainsHold
Jul 2020Morgan StanleyUpgradesEqual-WeightOverweight

View More Analyst Ratings for CAR
View the Latest Analyst Ratings


Related Articles (CAR + HTZ)

View Comments and Join the Discussion!

Posted-In: Analyst Color Earnings News Guidance Short Ideas Downgrades Travel Analyst Ratings Best of Benzinga

Latest Ratings

MRTXHC Wainwright & Co.Maintains257.0
NVDATruist SecuritiesMaintains672.0
BLKBMO CapitalMaintains715.0
BLKDeutsche BankMaintains838.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at