2024-02-05 23:32:34 ET
Summary
- Herc Holdings presents with strong economics and attractive starting valuations.
- Short-term catalysts include growth forecasts and starting valuations, while long-term catalysts include capital allocation and business returns.
- Industrials are well positioned on a risk-reward basis to deliver investment returns in the coming 12 months in our view.
Investment briefing
Selective opportunities within the industrials sector continue to present us with an attractive risk reward profile in our opinion. Nearing the end of Q4 2024 earnings season FactSet analysis estimates that the earnings growth rate for the S&P 500 index is 1.5% so far. For the industrials sector, the blended earnings growth rate has increased to 1.4%, in line with the broad index.
Meanwhile, bottom-up EPS estimates for the index are calling for $242/share in CY'24, looking at growth to $274/share beyond this. Call this optimistic, but it at least implies contribution from fundamentals this year in our estimation....
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For further details see:
Herc Holdings: Growth Built On Little Working Capital, Increasing Value Intrinsically