Hertz Shares Increase after Analyst Buy Upgrade
The shares of Hertz jumped almost 10% on Tuesday after the company was upgraded from neutral to buy by Northcoast Research. They said that the change was due to an improvement in business demand.
John Healy, the Northcoast Research analyst that made the upgrade, said that they believe that demand related to business travel is increasing and doing so faster than leisure travel is recovering from the recession. He continued that business in renting equipment is showing signs of stabilizing and may grow in the long-term. Healy added that it looks like Hertz will benefit from cost cutting.
After the upgrade, Hertz’s shares rose to $11.95 - a $1.17 increase. This continues 3 days of increases that have risen the company’s shares by about 20% since the end of March. The group had a 4% increase last Thursday. This is a big turnaround from February, when the company dropped to less than its 200-day low. Some experts think Hertz’s shares will trade at more than its $12.50 2009 high in just a few weeks at the rate it’s going now.
Meanwhile, Hertz isn’t the only car hire company doing better this month, with Dollar Thrifty Automotive Group jumping 3.5% to $34.71 and Avis Budget Group jumping 3.6% to $13.09. There’s also recovery showing for U-Haul, which is owned by Laggard Amerco, whose shares have increased 1%. Online car hire booking sites Priceline.com and Expedia are also performing well.
This is great news for the travel industry as a whole, as both leisure and business travel significantly declined during the recession. In the last couple months, there has been some uncertainty about if recovery has really started. This only shows that it has, but it will be rather slow - it’s always easier to go downhill than it is to go uphill.
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