Despite a strong July, shares of Hertz (HTZ - Free Report) sunk on Monday morning after an analyst downgraded the rental car company’s stock.
Barclays PLC downgraded Hertz stock from "equal weight" to “underweight" in a recent note to clients. The updated analysis also lowered the company’s stock price to $9 per share, and the analysts touched on the likelihood that Hertz won’t be able to bring down the cost of its rental car fleet soon.
Barclays’ note helped send the company’s stock down by 6% in pre-market trading, and shares eventually plummeted 15.40% in morning trading to $14.68 per share. Monday morning’s downward movement has sent the stock down to its lowest level since mid-July.
Today’s downgrade came after the company began to claw its way back up from its sub-$9 per share 52-week low it reached in June. The company’s stock has crashed since last August when it was trading at $52 per share.
Hertz has been hurt by weak used car sales, which negatively impacts the company’s bottom line. The tough used car market makes it much harder for the company to recoup costs when upgrading its rental car fleet.
However, the month of July had been kind to Hertz after reports emerged that the company partnered with Apple (AAPL - Free Report) to help conduct autonomous car tests.
Monday morning has seemingly sent Hertz investors running quickly—its shares have already traded above their average volume before lunch.
Luckily for investors, they won’t have to wait too much longer to know if today’s downgrade reflects what is really going on with the rental car giant, as the company is set to report its second-quarter earnings on August 8.
Hertz is currently a Zacks Rank #3 (Hold) and scored an “A” for Value in our style score system.
Another Rental Car Company
The Hertz downgrade impacted another company in the industry. Shares of fellow rental car power Avis Budget Group (CAR - Free Report) dipped 5.46% in mid-morning trading. Avis is currently a Zacks Rank #3 (Hold) and scored an “A” for Value and “B” for Growth in our style score system.
Avis is set to report its second-quarter earnings on August 8.
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