Back to top

Hertz Global (HTZ) to Post Q3 Earnings: Is a Beat in Store?

Read MoreHide Full Article

Hertz Global Holdings, Inc. (HTZ - Free Report) is scheduled to release third-quarter 2018 results on Nov 8, after market close.

In the second quarter of 2018, the company reported narrower-than-expected loss as well as better-than-expected revenues. Moreover, the bottom line improved significantly year over year on the back of the higher revenues. Also, the top line grew on a year-on-year basis.

Things are looking up for the company as far as third-quarter 2018 results is concerned. The Zacks Consensus Estimate for earnings has increased 9.9% in the past 90 days. This reflects the optimism surrounding the stock. 

Moreover, shares of the company have outperformed the industry in the July-September period. The stock has gained 6.5% compared with the industry’s rise of 2%.

 

 

Given this background, let’s delve deep into the factors that are likely to influence the company's third-quarter 2018 results.

Hertz Global is expected to perform well in the impending quarter on the back of strong performance in the U.S. Rental Car segment. Efficient fleet management is likely to drive growth in the key segment.

Moreover, the travel and leisure industry is benefiting from several factors like a booming economy, higher incomes, improved consumer confidence and a strong labor market. This bodes well for Hertz Global in the to-be-reported quarter. The company is likely to benefit from expected increase in rental pick-ups, primarily owing to multiple locations across the country and a dedicated customer service team.

However, the company is undertaking initiatives to revive its fortunes through the turnaround plan. As the company is investing heavily in the plan, the bottom-line performance is likely to be affected in the upcoming quarterly results.

Additionally, pricing pressure continues to be a major headwind, stemming from low used car prices.

 

What Does the Model Say?

Our proven model shows that Hertz Global is likely to beat estimates in the to-be-reported quarter, as it has the perfect combination of the following key ingredients:

Earnings ESP: Hertz Global has an Earnings ESP of +13.48%. The Most Accurate Estimate is at $2.02 per share, higher than the Zacks Consensus Estimate of $1.78. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Hertz Global carries a Zacks Rank #2 (Buy). Notably, stocks with a favorable Zacks Rank #1 (Strong Buy), 2 or 3 (Hold) have significantly higher chances of beating estimates.

Conversely, we caution against stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Other Stocks to Consider

Investors interested in the broader Transportation sector may check other companies with the right combination of elements to beat estimates in the next releases:

Frontline Ltd. (FRO - Free Report) has an Earnings ESP of +30.77% and a Zacks Rank #3.  The company is scheduled to release third-quarter 2018 results on Nov 30. You can see the complete list of today’s Zacks #1 Rank stocks here.

Safe Bulkers, Inc. (SB - Free Report) has an Earnings ESP of +13.04% and a Zacks Rank #3. The company will release third-quarter 2018 results on Nov 7.

Navios Maritime Partners L.P. (NMM - Free Report) has an Earnings ESP of +9.09% and a Zacks Rank #3. The company is expected to release third-quarter 2018 results on Nov 13.

Looking for Stocks with Skyrocketing Upside?

Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.

Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.

See the pot trades we're targeting>>



More from Zacks Analyst Blog

You May Like