Jefferies holds Hertz stock rating on weak quarter, demand concerns

Jefferies has maintained a "Hold" rating on Hertz Global stock with a price target of $2.00, according to Investing.com. The company's shares are currently trading at $1.64, marking a 71% decline over the past year. This performance is attributed to weaker-than-expected revenue and EBITDA, which both fell short of consensus estimates.

The decline in travel demand, particularly in international markets, has been a significant factor in the company's underperformance. Additionally, Hertz is grappling with a precarious liquidity situation, owing to a $20.2 billion debt load and negative levered free cash flow of $1.25 billion in the last twelve months. Analyst Stephanie Moore from Jefferies notes that the company is burning through cash rapidly and may struggle to meet interest payments on its debt.

The Financial Health score assigned by InvestingPro Tips rates the company as "WEAK," with 16 more ProTips available to subscribers. Hertz has anticipated softer demand to persist, and its cost structure is expected to remain elevated. Despite a 5.6% year-over-year revenue increase and a 15% rise in adjusted corporate EBITDA to $233 million, Hertz missed Wall Street's earnings forecast, reporting adjusted diluted earnings per share of $0.14, well below the expected $0.25.

While the company achieved its best EBITDA result in three years, the improvement was tempered by weaker international performance and higher repair costs.