Analyst Sherif El-Sabbahy from Bank of America Securities reiterated a Sell rating on Herc Holdings and keeping the price target at $100.00.
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Sherif El-Sabbahy’s rating is based on several factors impacting Herc Holdings. The company’s recent acquisition of H&E has introduced significant challenges, including personnel disruptions and fleet churn, which have negatively affected rental performance. The integration process appears to be complex, and the market conditions, particularly in rate-sensitive construction sectors, are not favorable.
Additionally, H&E’s rental revenue has seen a notable decline, with substantial year-over-year decreases in the first and second quarters. This decline is expected to continue, contributing to a cautious outlook. Despite Herc’s efforts to stabilize and improve cost synergies, the overall macroeconomic environment remains turbulent, leading to a conservative stance. Consequently, Sherif El-Sabbahy maintains a Sell rating, with a price objective of $100, reflecting these ongoing challenges.