Business

Hertz stock jumps after analysts recommend investors buy, also says rival Avis Budget is a seller

Shares of Hertz Global Holdings Inc.

JPMorgan analyst Ryan Brinkman has initiated Hertz at overweight and has a stock price target of $30, implying a roughly 16% increase from current levels.

Stock
HTZ,
+ 7.65%

rose 7.8% in afternoon trading. It has dropped 0.9% since closing First day trading on Nasdaq on the 9th of November after that emerge from bankruptcy on June 30.

Brinkman gave several reasons for his optimistic stance towards Hertz:

  • “Several industries and macro trends are strong, including an “unprecedentedly strong” used car valuation landscape and supply/demand imbalances affecting rental cars, both are all products of the pandemic and its consequences.

  • These trends are expected to “decline” over the next 12 to 18 months, as there is no quick or easy solution to the global semiconductor shortage that is holding back light vehicle production.

  • “Many company-specific initiatives were announced recently,” including a new partnership with American Express Co.
    AXP,
    + 3.44%
    ,
    Tesla Inc.
    TSLA,
    -0.58%
    ,
    Uber Technologies Inc.
    UBER,
    + 6.68%

    and Carvana Co.
    CVNA,
    + 0.80%
    .
    Those initiatives will help mitigate the eventual drop in macro-corrective winds.

  • “A completely refreshed post-bankruptcy capital structure,” has less corporate debt and essentially more liquidity, which reduces risk.

  • “What we consider to be relative value to Avis Budget stock, which also benefits from the same macro factors as Hertz but trades at a “materially higher” valuation multiple.

Shares of Hertz are up 56.6% in the past three months, including the time it’s been trading over the counter. But Avis Budget shares
CAR,
+ 3.26%

nearly tripled in the same period, up 194.4 percent, after they received treat meme in the wake of strong 3rd quarter results, follow a leap in discount bets on stocks. For context, the S&P 500
SPX,
+ 1.26%

has increased 1.6% in the past three months.

Brinkman rates Avis Budget low with a price target of $225, 17% below current levels.

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FactSet, MarketWatch

Brinkman isn’t the only analyst with a bullish call for Hertz on Monday. Deutsche Bank’s Chris Woronka has restored coverage, after a limited period, with a buy rating and a stock price target of $34.

That target, implying a 31% increase from current levels, makes Woronka Wall Street, the most optimistic Hertz analyst out of seven analysts surveyed by FactSet, who includes the company.

Woronka said his buy rating is a “call to price relative, above all,” as he rates Avis Budget at sell.

“In our view, the current valuation gap between the two companies is unreasonably wide,” Woronka wrote.

Woronka said that while Hertz recently announced $2 billion stock buyback program. third quarter.

“Our sense is that it may take a while for more investors to re-enter [Hertz] “That said, the potential ability to expand the investor base based on larger market capitalization and forward-looking growth initiatives could appeal to a wider variety of groups,” wrote Woronka. investors, should be seen as a positive catalyst.”

Source link Hertz stock jumps after analysts recommend investors buy, also says rival Avis Budget is a seller

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