Market Overview

Hertz Upgraded By Macquarie Research: Here's Why

Share:
Hertz Upgraded By Macquarie Research: Here's Why

Elevated investments and spending by Hertz Global Holdings, Inc (NYSE: HTZ) will soon result in a favorable impact to the rental car company's business, according to Wall Street's newest bull analyst.

The Analyst

Macquarie Research's Hamzah Mazari upgraded Hertz's stock rating from Neutral to Outperform with a price target boosted from $26 to $30.

The Thesis

Hertz's stock has seen a fair amount of selling pressure for several years. But now the industry dynamics within the rental car business have changed and Hertz is considered a "more functional oligopoly," Mazari said in the upgrade note. (See the analyst's track record here.)

After years of heavy investment and spending, Mazari's EBITDA estimate for 2019 is "significantly higher" than what the Street is modeling. The 2019 consensus EBITDA stands at $619 million, but the analyst's 2019 EBITDA estimate is $879 million.

The short interest as a percentage of total float is 25 percent, but the actual figure is "much higher" when excluding the involvement of activist investors at 48 percent, the analyst said.

Finally, Hertz's balance sheet is now "less of a concern" after the company extended debt maturities to 2020 and is now "comfortably" within its consolidated first lien financial maintenance covenant.

Price Action

Shares of Hertz gained more than 3 percent after Thursday's opening bell and was up slightly at the time of publication. 

Related Links:

Morgan Stanley On Autos: Expect Autonomous 'Noise,' 'Idiosyncratic' Returns

The Hertz Rally Comes To A Screeching Halt

Latest Ratings for HTZ

DateFirmActionFromTo
Aug 2019UpgradesEqual-WeightOverweight
Mar 2019UpgradesUnderweightEqual-Weight
Feb 2019MaintainsHoldHold

View More Analyst Ratings for HTZ
View the Latest Analyst Ratings

Posted-In: car rentals Hamzah Mazari Macquarie ResearchAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga

 

Related Articles (HTZ)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
GMLPReiterates10.0
JWNReiterates29.0
DSGXInitiates Coverage On43.0
ZMAssumes115.0
LOGMAssumes77.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
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.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
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 vipaccounts@benzinga.com

Baird: Three Catalysts That Could Help Forward Air Deliver

Finding Opportunity In Bitcoin's Reckoning