Herc Holdings, the Industrials sector company, was revisited by a Wall Street analyst yesterday. Analyst Mircea Dobre from Robert W. Baird upgraded the rating on the stock to a Buy and gave it a $160.00 price target.
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Mircea Dobre has given his Buy rating due to a combination of factors that suggest a positive outlook for Herc Holdings. The company is the third-largest equipment rental provider in North America, and there are signs of stabilization in the rental industry expected to continue into 2026. This stabilization, along with improved cost and fleet management following the H&E acquisition, is anticipated to lead to gradual balance sheet deleveraging, enhancing equity value. Despite some near-term earnings per share risks, the risk/reward profile appears favorable as market conditions and demand are projected to improve.
Additionally, recent data points indicate a potential turnaround in the rental industry, with slight revenue growth and fewer budget misses reported in the third quarter of 2025. The focus on larger projects has pressured rental rates, but signs of stabilization and expectations for normalized growth in 2026 are emerging. The underperformance of HRI shares year-to-date, combined with the potential for meaningful deleveraging and a favorable valuation, presents an opportunity for a turnaround, making the stock an attractive investment option.