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Investing.com - Susquehanna has raised its price target on Hertz Global (NASDAQ:HTZ) to $6.00 from $5.00 while maintaining a Neutral rating on the stock, citing progress in the car rental company’s daily profit per unit (DPU) metrics. The stock, currently trading at $5.99, has shown significant momentum with a 63% year-to-date return, according to InvestingPro data, though the company faces notable operational challenges with weak gross profit margins.
The firm noted that Hertz made "solid progress with DPU" in the second quarter, with results falling below the $300 "North Star" target even when accounting for gross operating system adjustments. Pricing remains a challenge for the company, with revenue per day (RPD) declining year-over-year for eight of the last nine quarters, even after adjusting for changes in fleet mix. InvestingPro analysis reveals concerning fundamentals, including a substantial debt burden of $18.9 billion and a negative free cash flow yield, suggesting ongoing operational pressures. Get access to 10+ additional ProTips and comprehensive analysis with an InvestingPro subscription.
Susquehanna expressed uncertainty about whether Hertz’s gradual rollout of a new revenue management system would result in immediate improvements or more gradual gains in revenue per unit (RPU). The firm suggested that Hertz’s target of achieving more than $1,500 in RPU might be delayed until deep into the first half of 2026, given the uncertain demand environment expected after Labor Day.
Hertz reported second quarter 2025 adjusted EBITDA of approximately $1 million, exceeding Susquehanna’s estimate of a $20 million loss and the consensus expectation of a $19 million loss. The results also surpassed the company’s May guidance of breakeven performance.
The outperformance versus Susquehanna’s model was primarily driven by better-than-expected top-line performance, specifically within Hertz’s international operations.
In other recent news, Hertz Global Holdings (OTC:HTZGQ) reported its earnings for the second quarter of 2025, showing a better-than-expected performance. The company posted an earnings per share (EPS) of -$0.34, surpassing the forecast of -$0.40. Revenue came in at $2.18 billion, slightly above the anticipated $2.17 billion. Despite these positive results, Goldman Sachs reiterated its Sell rating on Hertz Global stock with a price target of $3.00. The firm noted that while the stock outperformed after a slight beat on EBITDA, the longer-term outlook remains largely unchanged. These developments have drawn attention from investors and analysts alike. Hertz Global’s recent performance and analyst opinions highlight ongoing discussions about the company’s future prospects.
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