Bloomberg News

Hertz Advances to 5-Year High on 2015 Profit Forecast

April 02, 2013

Hertz Advances to 5-Year High on 2015 Forecast

Hertz Global Holdings Inc. is benefiting from its acquisition last year of Dollar Thrifty Automotive Group Inc. for about $2.6 billion, which solidified its position as the second-largest U.S. rental-car chain. Photographer: David Paul Morris/Bloomberg

Hertz Global Holdings Inc. (HTZ:US), the largest publicly traded U.S. auto-rental chain, rose to its highest level in more than five years after projecting profit for 2015 that was higher than analysts’ estimates.

The shares (HTZ:US) jumped 6.9 percent to $23.41 at the close in New York, the highest price since October 2007. Hertz has advanced 44 percent this year compared with an 10 percent gain for the Standard & Poor’s 500 Index.

Hertz is benefiting from its $2.6 billion acquisition last year of Dollar Thrifty Automotive Group Inc., which solidified its position as the second-largest U.S. rental-car chain, behind closely held Enterprise Holdings Inc. Adjusted earnings per share for 2015 will be $3.10 to $3.30, the Park Ridge, New Jersey based company said today in an investor presentation posted on its website. Analysts projected $2.39 a share, the average of estimates (HTZ:US) compiled by Bloomberg.

“The 2015 plan is clearly better than most expected,” Fred Lowrance, a Nashville, Tennessee-based analyst at Avondale Partners LLC, said in an e-mail. “The Dollar Thrifty acquisition should prove to be an even bigger game-changer than expected, and the legacy rental car and equipment-rental businesses are likely to continue the positive momentum that they displayed over the last couple of years.”

Lowrance has a market outperform rating on the stock.

Revenue will increase at a compounded annual rate of 12.5 percent to 13.5 percent through 2015, compared with a September 2011 forecast of as much as 8 percent, the company said today. Hertz said it plans to use its cash to repay debt and expand the business as well as return it to shareholders.

To contact the reporters on this story: Mark Clothier in Southfield, Michigan, at mclothier@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net


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Companies Mentioned

  • HTZ
    (Hertz Global Holdings Inc)
    • $24.27 USD
    • -0.98
    • -4.04%
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