BofA starts Hertz at Neutral on ‘sizable’ vehicle interest expenses

As previously reported, BofA analyst John Babcock initiated coverage of Hertz with a Neutral rating and $9 price target. 2024 headwinds are factored in the stock, but earnings growth will likely be curbed by a sizable increase in vehicle interest expense in 2024 as well as in 2025, the analyst tells investors. Leverage at the world’s third-largest rental car company is also at the highest level since it emerged from bankruptcy in 2021, notes the analyst, who is valuing the rental car companies closer to where they traded pre-pandemic and points out that Hertz is trading at the higher end, reflecting current healthier industry fundamentals.