RFV - Hertz Faces Tough Road Ahead: High Fleet Costs Liquidity Concerns Trigger Downgrades | Benzinga
Hertz Global Holdings, Inc (NASDAQ:HRZ) reported first-quarter FY24 sales growth of 1.6% year-on-year to $2.08 billion. Adjusted EPS of $(1.28) missed the analyst consensus estimate of $(0.44).
The following are the reactions of various analysts regarding the company's first-quarter earnings.
Goldman Sachs – Reiterate Sell, slash price target from $7 to $4
Analyst Lizzie Dove noted that Hertz’s 1Q EBITDA miss has heightened investor concerns, particularly regarding HTZ's First Lien Covenant and its minimum liquidity requirement, which are now increasingly in focus.
Though management expects to refresh the fleet over the next year, the analyst believes cash flow management around the fleet will be the key lever for the company to comply with its covenant requirement.
The analyst's model expects trends to get worse before they get better, with $400 million free cash flow burn in FY24 and does not see a clear catalyst path over the next 12 months.
Vehicle depreciation in 1Q24 increased $588 million, or $339 on a ...