Barclays Initiates Coverage on Hertz Global Stock, Assigns Underweight Rating and $3.00 Price Target
In a recent development, Barclays has initiated coverage on Hertz Global stock, giving the car rental company an Underweight rating and setting a price target of $3.00. The firm pointed out several challenges that Hertz is currently facing, including a fleet overhaul that involves replacing a significant number of electric vehicles and updating its systems.
Hertz is currently experiencing difficulties with its earnings before interest, taxes, depreciation, and amortization (EBITDA) and free cash flow (FCF). Despite expectations of some improvement next year, liquidity concerns remain a key issue for the company, with Barclays anticipating that Hertz will likely need additional funding in the coming years.
Barclays' analysis suggests that the stock will face downward pressure in the near term due to ongoing fleet and system upgrades, as well as financial challenges. The firm's price target of $3.00 reflects its cautious outlook on Hertz's financial health and future prospects.
In other news, Hertz Global Holdings has announced significant developments, including expanding its Board of Directors with the appointment of former Home Depot CEO, Mr. Francis "Frank" Blake, and Ms. Lucy Clark Dougherty from Polaris Inc. On the financial front, Hertz reported a Q2 revenue of $2.4 billion and an adjusted corporate EBITDA loss of $460 million, while maintaining a strong liquidity position.
Following these developments, Morgan Stanley and JPMorgan have revised their price targets on Hertz Global. Morgan Stanley has lowered its price target to $7.00, while JPMorgan has reduced its target to $5.00. Hertz is focusing on strategic priorities such as fleet rotation, revenue growth, and cost management as part of its business transformation plan.
However, challenges with the company's electric vehicle initiative have led to losses exceeding $500 million, as reported by JPMorgan. These recent developments highlight the ongoing struggles and opportunities for Hertz Global.
Analysis:
The initiation of coverage on Hertz Global by Barclays with an Underweight rating and $3.00 price target indicates a cautious outlook on the company's financial health. The challenges faced by Hertz in terms of EBITDA, FCF, and liquidity, coupled with ongoing fleet and system upgrades, are expected to impact the stock's performance in the near term. Investors should consider these factors when evaluating their investment decisions in Hertz Global, as the company works towards addressing its operational and financial hurdles for future growth and success.