Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Hertz Global Holdings Surged on Friday

By Daniel Miller - Mar 11, 2016 at 2:49PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Despite the company's bumpy ride over the last year, Friday's 10% pop brought some short-term relief.

Image source: Hertz Global Holdings' investor day presentation. 

What: Shares of Hertz Global Holdings (HTZG.Q), a car, truck, equipment, and rental and leasing company with operations in North America and Europe, are popping 10% higher today after an analyst reversed its rating by two notches.

So what: Morgan Stanley moved its rating of Hertz from "underweight" to "overweight," but maintained its $13 price target on the stock, which offers a roughly 20% upside from its current price. Part of the reasoning behind the rating change is simply because the stock price has collapsed over the past 12 months, and it appears to be oversold.

Adam Jonas, an analyst at Morgan Stanley, noted that the management's focus on cost reduction and its healthy awareness of how mobile technology and software could transform the car rental business, should prove beneficial over the long term.

HTZ Chart
HTZ data by YCharts.

Now what: Despite today's jump in stock price, headwinds remain. More specifically, it's likely that there will continue to be soft pricing in the U.S. rental car market during the first half of 2016. It'll be important for investors therefore to monitor the company's progress on increasing its customer satisfaction across its major brands, enhance its fleet management efficiency, and cut costs.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Hertz Global Holdings, Inc. Stock Quote
Hertz Global Holdings, Inc.

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/03/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.