Hertz (NASDAQ:HTZ) Plans to Sell 20,000 EVs
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Hertz (NASDAQ:HTZ) Plans to Sell 20,000 EVs

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Hertz stock fell in pre-market trading as it announced the sale of 20,000 EVs from its U.S. fleet.

Vehicle rental company Hertz Global Holdings (NASDAQ:HTZ) fell in pre-market trading after announcing that it will sell around 20,000 EVs from its U.S. fleet, or 33% of its global EV fleet. Hertz started selling off these vehicles in December last year and will continue this process throughout this year.

The company expects to reinvest part of the cash raised from the EV sales into the purchase of internal combustion engine (ICE) vehicles to satisfy customer demand. As a result of its EV sales, Hertz will recognize around $245 million of incremental net depreciation expense in the fourth quarter of FY23.

Hertz expects that the sale of EVs will help it balance better the expected demand and supply of EVs. The company aims to enhance profitability by reducing lower-margin EV rentals and minimizing damage expenses. The intended reduction in the EV fleet, reinvestment in ICE vehicles, and strategic initiatives are expected to boost Adjusted Corporate EBITDA in 2024 and 2025, generating an estimated $250 million to $300 million in incremental free cash flow.

Is HTZ Stock a Good Buy?

Analysts remain cautiously optimistic about HTZ stock with a Moderate Buy consensus rating based on two Buys and three Holds. Over the past year, HTZ stock has declined by more than 40%, and the average HTZ price target of $14.50 implies an upside potential of 55.1% at current levels.


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