On Thursday, Barclays initiated coverage on Hertz Global (NASDAQ:HTZ) stock, assigning the car rental company an Underweight rating and setting a price target of $3.00. The firm cited a series of challenges facing Hertz, including an extensive fleet overhaul that involves replacing a significant number of electric vehicles (EVs) and updating its systems.
As per the coverage launch, 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 that could bring EBITDA back to a breakeven point, liquidity concerns remain a key issue for the company. Barclays anticipates that Hertz will likely require additional funding in the coming years to sustain its operations.
The firm's analysis suggests that the stock will continue to face downward pressure in the near term. The ongoing fleet and system upgrades, coupled with the financial challenges, are expected to weigh on Hertz's performance.
Barclays' position reflects a cautious outlook on Hertz's financial health and future prospects. The price target of $3.00 signals the firm's expectation that Hertz's stock value may not see significant growth soon due to the outlined operational and financial hurdles.
In other recent news, Hertz Global Holdings (OTC:HTZGQ) has undergone significant developments. The company recently announced the expansion of its Board of Directors with the appointment of former Home Depot (NYSE:HD) CEO, Mr. Francis "Frank" Blake, and Ms. Lucy Clark Dougherty from Polaris (NYSE:PII) Inc. This move is part of Hertz's strategy to bolster its leadership for future success.
On the financial front, Hertz reported a Q2 revenue of $2.4 billion and an adjusted corporate EBITDA loss of $460 million. Despite these figures, the company maintains a strong liquidity position, with $1.8 billion available at the end of Q2.
In response to these developments, both Morgan Stanley and JPMorgan have revised their price targets on Hertz Global. Morgan Stanley has lowered its price target on the company's shares to $7.00, while maintaining an Equalweight rating. JPMorgan, on the other hand, has reduced its price target from $6.00 to $5.00, also maintaining a neutral rating.
Hertz Global is also focusing on strategic priorities, including fleet rotation, revenue growth, and cost management, as part of its business transformation plan set to be completed by the end of 2025.
However, challenges with the company's electric vehicle initiative have led to losses exceeding $500 million, as reported by JPMorgan. These are the most recent developments for Hertz Global.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.