Bank of America Securities analyst Federico Merendi maintained a Sell rating on Hertz Global today and set a price target of $3.20.
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Federico Merendi has given his Sell rating due to a combination of factors impacting Hertz Global’s financial outlook. The primary concern is the company’s liquidity position, which remains under pressure due to ongoing litigation issues. The delay in the $328 million payment, now postponed until at least October 2025, adds uncertainty to Hertz’s financial commitments and could potentially lead to further legal challenges.
Additionally, while there has been an improvement in rental demand and used vehicle prices, these factors are not sufficient to offset the negative impact of lower revenue per day and the overall choppy pricing environment observed in April and May. Despite a slight adjustment in the price objective to $3.20, reflecting lower vehicle interest expenses, the overall valuation remains unattractive with a significant downside potential. These elements combined contribute to the underperform rating, as short-term fundamentals are weighed down by these financial and operational challenges.
Merendi covers the Consumer Cyclical sector, focusing on stocks such as PHINIA Inc., Tesla, and Lucid Group. According to TipRanks, Merendi has an average return of 2.0% and a 53.85% success rate on recommended stocks.