In a report released today, Sherif El-Sabbahy from Bank of America Securities reiterated a Sell rating on Herc Holdings (HRI – Research Report), with a price target of $155.00.
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Sherif El-Sabbahy has given his Sell rating due to a combination of factors impacting Herc Holdings. Despite Herc Holdings’ Q4 results slightly exceeding expectations, the company’s outlook for 2025 shows a more subdued growth trajectory, with EBITDA projections falling 3% short of consensus expectations. This weaker-than-expected guidance is a key reason for the Sell rating, as it led to a noticeable decline in the stock’s value.
The local market’s growth remains constrained by prevailing interest rates, and while mega-projects are expected to provide some growth momentum, they are not sufficient to offset the overall conservative outlook. Furthermore, even with a projected positive free cash flow for 2025, the company’s first year as a cash taxpayer, the REBITDA flowthrough is anticipated to remain limited. These factors combined contribute to a cautious view on Herc Holdings, justifying the reiterated Underperform rating and a reduced price objective of $155.