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Hertz Global (HTZ) Stock Up 35% in a Month: More Room to Run?

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Shares of Hertz Global Holdings (HTZ - Free Report) have outperformed the industry in a month’s time. The stock has gained 35.1% against the industry’s 1% decline.

 

Let’s delve deep to unearth the reasons behind the company’s impressive price performance and find out if there is room for further appreciation:

Earlier this month, Hertz Global reported impressive third-quarter 2018 numbers, wherein both earnings and revenues surpassed their respective estimates. The upbeat performance can be attributed to higher U.S. Rental Car segment revenues.

Segmental revenues improved 10% year over year mainly backed by increased volumes and pricing both on and off airport. Vehicle utilization improved 30 basis points to 81% owing to efficient fleet management. Efficient fleet management and strong pricing in the U.S. market should continue to boost results at this key segment, which accounts for bulk of its top line.

Additionally, the ongoing Thanksgiving holiday period (Nov 16–Nov 27) should be an extremely busy one for Hertz Global. This can be made out from American Automobile Association’s (AAA) bullish stance.

Projections from the AAA indicate that 54.3 million Americans will travel 50 miles or farther from home this Thanksgiving. This represents a year-over-year increase of 4.8% and the highest in terms of travel volume since 2005. Most Americans, an estimated 48.5 million, will travel by road, which is 5% higher than last year.

Such upbeat predictions bode well for Hertz Global — a key player in the vehicle rental industry — as it looks to benefit from the expected increase in rental pick-ups, courtesy of thousands of locations across the country and a dedicated customer service team.

In light of these positives, we believe that Hertz Global should be added by investors to their portfolios. The Zacks Rank #2 (Buy) carried by the stock seems to suggest the same.

Furthermore, the company’s Momentum Score of A highlights its short-term attractiveness. 

Other Stocks to Consider

Investors interested in the Zacks Transportation sector may also consider Air France-KLM SA (AFLYY - Free Report) , Frontline Ltd. (FRO - Free Report) and Spirit Airlines, Inc. (SAVE - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Air France, Frontline and Spirit Airlines have gained 35.1%, 33.8% and 35.6%, respectively, in the past six months.

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