An analyst changing an opinion on a stock can be a major problem for that stock. Especially if the pivot turns out to be negative. That’s what happened to car rental giant Hertz Global (NASDAQ:HTZ) when one analyst dropped a bullish rating down a notch, causing Hertz Global to plunge over 4% in Thursday afternoon’s trading.
The pivot, which saw Morgan Stanley’s Adam Jonas lower the rating on Hertz to Hold, was enough to trigger hefty losses for Hertz. Jonas stated that he has lower confidence that Hertz is fundamentally modifying its fleet strategy, particularly after Hertz moved to cancel purchases with Polestar (NASDAQ:PSNY) and Tesla (NASDAQ:TSLA).
While Jones pointed out that Hertz’s move to reduce EV units by 20,000 was a “good first step,” there’s more room for improvement here, and there are other issues in play. Decreased visibility around major economic drivers, as well as share buyback plans, suggest that Hertz is starting to catch on but is still under-earning right now, reports note.
Another Layoff Plan?
Hertz’s plan to cut costs is on the rise as well. It’s reportedly considering layoffs as part of a plan to save $250 million overall. With Hertz’s earnings already looking like a disaster—a loss of $1.36 against analyst projections of a loss of $0.76—something needs to be done. Though admittedly, some wonder if that’s less a part of Hertz’s problem and more a part of the electric vehicle field altogether; electric vehicles have come under fire lately for their poor performance in the cold, which winter showed off to great effect this year.
Is Hertz a Good Stock to Buy Now?
Turning to Wall Street, analysts have a Hold consensus rating on HTZ stock based on one Buy and five Holds assigned in the past three months, as indicated by the graphic below. After a 55.52% loss in its share price over the past year, the average HTZ price target of $10.80 per share implies 27.43% upside potential.
