Oppenheimer analyst Ian Zaffino initiated coverage of Hertz with an Outperform rating and $31 price target. With a “meaningfully improved cost structure, an under-levered balance sheet and newfound competitive discipline,” Hertz is an “interesting post-bankruptcy equity,” Zaffino tells investors in a research note. The analyst says the company has the potential to roughly double its pre-COVID EBITDA margins, even as auto production and the operating environment normalize. Further, he believes Hertz management has been “very forward-looking” with the recently signed agreements with Tesla, Carvana, and Uber. In addition, the company has a “shareholder-friendly” $2B buyback program in place, adds Zaffino. He believes believe the $31 target can be achieved.
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