Benzinga | Dec 6, 2021 12:58PM EST

Multiple Analyst Firms Initiate Coverage On Hertz Global

* Several analyst firms initiated coverage on Hertz Global Holdings Inc (NASDAQ:HTZ), and Deutsche Bank reinstated it.

* Deutsche Bank analyst Chris Woronka reinstated coverage of Hertz Global with a Buy rating and a price target of $34, implying 32% potential upside.

* Woronka mentions that the "current valuation gap" between Hertz and Avis Budget Group Inc (NASDAQ:CAR) is "illogically wide."

* The analyst noted Hertz recently announced a $2B share repurchase authorization that would enable it to buy back 17% of the current market cap, while it is highly unlikely that Avis is in the market buying its stock now.

* He believes it will likely take some time for many investors to reengage on the Hertz story. However, the "potential ability to broaden out the investor base in light of a larger market cap and forward-looking growth initiatives that can appeal to multiple investor groups, should be viewed as a positive catalyst."

* Morgan Stanley analyst Billy Kovanis initiated Hertz Global with an Equal Weight rating and a price target of $27, implying an upside of 5%.

* While bullish on Hertz's ability to leverage its strategic relationships in the long term, Kovanis remains cautious on the potential for earnings to revert downward by 2023.

* He views Hertz as a relative outperformer to Avis, on which he has an Underweight rating.

* Barclays analyst Brian Johnson initiated with an Overweight rating and a price target of $28, implying an upside of 9%.

* The analyst is "constructive" on Hertz's turnaround story and appreciates its "bold moves" to position itself as a premier electric vehicle operator.

* JPMorgan analyst Ryan Brinkman initiated Hertz with an Overweight rating and a price target of $30, implying an upside of 16.6%.

* Brinkman sees a "number of very strong industry and macro tailwinds" for the company, including an "unprecedentedly strong" used vehicle pricing backdrop and the supply/demand imbalance affecting rental cars.

* He mentions, there is no quick or easy solution to the global semiconductor shortage constraining light vehicle production.

* He believes an investment in Hertz offers investors "substantial upside exposure to potentially higher than expected inflation."

* Goldman Sachs analyst Stephen Grambling initiated with a Neutral rating and a price target of $32, implying an upside of 24%

* Grambling says the company benefits from an "ideal backdrop" for the rental car industry of rapidly recovering travel demand, reduced supply of industry-wide fleets, and a broader vehicle shortage driving up used car pricing.

* The analyst, however, sees a "wide-risk reward," saying Hertz's strategic pivot is "still proving out."

* Price Action: HTZ shares are trading higher by 6.77% at $25.69 and CAR higher by 1.92% at $266.16 on the last check Monday.