Herc Holdings initiated with a Buy at Citi

Citi initiated coverage of Herc Holdings (HRI) with a Buy rating and $165 price target. The firm says the company’s pending acquisition of H&E Equipment (HEES) presents “attractive upside despite an uncertain near-term macro outlook.” Citi’s constructive view on Herc’s ability to capture deal synergies and realize outgrowth from solid mega project tailwinds provides the framework for a “compelling” earnings trajectory and margin expansion in what is an otherwise uncertain macro environment, the analyst tells investors in a research note. The firm views the stock’s valuation as attractive at current levels.