Reassessing Hertz (HTZ) Valuation After Analyst Downgrades and Bearish Brokerage Calls

Recent analyst downgrades and cautious calls from several brokerages have put fresh pressure on Hertz Global Holdings (HTZ). The stock has slid as sentiment soured, despite no new operational headlines from the company itself.

See our latest analysis for Hertz Global Holdings.

Those bearish calls landed just as the stock was trying to stabilize, and despite a recent bounce, the share price return is still negative over the last three months. The year to date share price return remains strongly positive, which hints that longer term momentum is cooling rather than accelerating.

If this shift in sentiment around Hertz has you reassessing the auto space, it might be worth exploring other listed auto manufacturers to see how the market is pricing different risk reward profiles right now.

With analysts leaning cautious despite a still solid year to date gain, the key debate now is whether Hertz’s recent pullback leaves the shares undervalued or if the market is already pricing in any realistic recovery in growth.

Most Popular Narrative: 18.8% Overvalued

With Hertz Global Holdings last closing at $5.22 against a narrative fair value of $4.39, the narrative suggests the recent rally is running ahead of fundamentals.

The analysts have a consensus price target of $4.014 for Hertz Global Holdings based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $6.0, and the most bearish reporting a price target of just $3.0.

Read the complete narrative.

Want to see what is powering that gap between rising earnings, modest revenue growth and a surprisingly low future profit multiple? The full narrative unpacks the exact financial path that has to play out for today’s price to make sense, step by step, in numbers.

Result: Fair Value of $4.39 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, Hertz’s younger fleet and digital partnerships could accelerate margin improvement and challenge today’s cautious assumptions if utilization and pricing trends surprise on the upside.

Find out about the key risks to this Hertz Global Holdings narrative.

Another View: Market Ratios Tell a Different Story

While the narrative fair value flags Hertz as 18.8% overvalued, its price to sales ratio of just 0.2 times looks unusually low compared with the US transportation average of 1.1 times and a fair ratio of 0.4 times. This may hint at upside if sentiment normalizes.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Hertz Global Holdings Narrative

If you see the story differently or want to dig into the numbers yourself, you can craft a personalized view in just minutes. Do it your way.

A great starting point for your Hertz Global Holdings research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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