Rental car company Hertz Global Holdings Inc (NYSE: HRI)'s stock has seen significant
underperformance at a time when the market continues to make all-time highs.
Recent Stock Performance
In the past six months, shares were down around 60 percent while the
S&P gained 9 percent. While current underperformance has prompted investors to consider Hertz as a value investment, analysts
at Barclays are not convinced and have reduced their price target to $23.
“The key theme has been a mis-prioritization of impressive initiatives (great on paper but ultimately yielded little) over the
more basic blocking and tackling,” said Brian Johnson of Barclays.
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A Possible Future
While analysts believe that Hertz could reach the $30 levels, they feel that the story will take too long and has too many
uncertainties — historical execution risk and a new CEO.
The rental car business is also seeing pressure from a new wave of sharing economy rental car platforms like TURO, known as the Airbnb of cars, which streamlines the rental experience and
gives more options for the consumer.
“With a new CEO at the helm, it wouldn’t surprise us if it takes HTZ 18–24 months to fully address the issues and be well on the
path to recovering profitability.”
Barclay’s sees estimates likely to come down sharply, and are now forecasting 2017 EBITDA of $579 million vs a prior $750
million target, citing a less favorable business environment.
Barclays reiterated its Equal-Weight rating on the company.
At last check, shares of Hertz were up 2.23 percent at $49.56.
Image Credit: By Dwight Burdette (Own work) [CC BY 3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia Commons
Latest Ratings for HRI
Date |
Firm |
Action |
From |
To |
Dec 2016 |
Goldman Sachs |
Initiates Coverage On |
|
Neutral |
Nov 2016 |
Jefferies |
Initiates Coverage On |
|
Hold |
Aug 2016 |
Barclays |
Initiates Coverage on |
|
Equal-Weight |
View More Analyst Ratings for
HRI
View the Latest Analyst Ratings
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