Deutsche Bank ups target price of rental car firm Hertz on fleet cost improvement

Investing.com -- Analysts at Deutsche Bank have reported that Hertz Global Holdings Inc (NASDAQ:HTZ) is upgrading its fleet in a budget-friendly way. However, they also point out that there are still obstacles to reaching larger financial objectives.

Regarding the $1 billion fleet impairment charge Hertz reported in the third quarter, analysts noted that the effect on liquidity was not as severe as initially feared. This is because a significant portion of the impact had already been accounted for through the company's asset-backed securities (ABS) facility.

Analysts pointed out that Hertz's forecast for fleet expenses in the fourth quarter, projected to range from $350 to $375 per month, demonstrates a notable improvement.

The company plans to lower these expenses to under $300 each month by the end of 2025. “We believe that achieving this target could help us reach over $750 million in EBITDA in 2026.”

While the analysts warned that Hertz continues to encounter difficulties in reaching its overall cost-cutting goals and keeping prices stable due to rising competition in the car rental industry.

"It remains uncertain if Hertz will be able to recover its lost position in the high-end corporate sector and whether it can effectively boost revenue for the Dollar and Thrifty brands," they noted.

Database analysts increased their price target for Hertz shares from $3.20 to $4.45, while maintaining a "hold" rating.

“We think the current market price for HTZ is fair.”

Deutsche Bank has raised its price forecast for rental car company Hertz due to better management of fleet expenses.

The United States has established tariffs on solar panels imported from countries in Southeast Asia.

According to reports from the Financial Times, Italy is exploring options to challenge UniCredit's offer to acquire BPM.