'It Could Have Been Worse': The Best Way To Describe Hertz Q4 Results

Despite reporting wider-than-expected loss, Deutsche Bank said the fourth-quarter results of Hertz Global Holdings, Inc HTZ were “not as bad as feared,” especially on the U.S pricing front.

It seems investors too think on the same lines as shares have climbed more than 7 percent, while billionaire investor Carl Icahn recently doubled his position in the company.

Review Of The Quarter

The car rental company reported fourth-quarter adjusted EPS of ($0.71) versus Street estimate of ($0.55). Adjusted EBITDA came in at $12 million, lower than consensus estimate of $40 million.

In addition, margins fell 450bps, to 0.6 percent, hurt by depreciation, which rose 19 percent to $321 per month per unit. RPD (pricing) fell 1.3 percent on a -5.3 percent comp, while volume rose 1.3 percent on a +0.1 percent comp.

“Our view is that HTZ’s new CEO, Kathryn Marinello, will use 2017 as a rebuilding year,” analyst Chris Woronka wrote in a note.

Related Link: Is Carl Icahn Losing His Midas Touch?

Woronka expects the company to spend more revenue management personnel and technology to ensure that Hertz gets back to “blocking and tackling” before moving on to more ambitious initiatives in terms of rebuilding the core customer base.

If that is the case, the analyst expects negative Adjusted EBITDA growth in 2017 versus $553 million in 2016.

At last check, shares of Hertz rose 7.45 percent to $21.49. Woronka has a Hold rating on the shares, with a price target of $24.