Shareholders might have noticed that Hertz Global Holdings, Inc. (NYSE:HTZ) filed its first-quarter result this time last week. The early response was not positive, with shares down 9.5% to US$2.76 in the past week. The result was fairly weak overall, with revenues of US$1.9b being 3.5% less than what the analysts had been modelling. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.
Taking into account the latest results, the six analysts covering Hertz Global Holdings provided consensus estimates of US$6.39b revenue in 2020, which would reflect a painful 33% decline on its sales over the past 12 months. Prior to the latest earnings, the analysts were forecasting revenues of US$6.60b in 2020, and did not provide an earnings per share estimate. The consensus seems a bit less optimistic overall, with the revenue forecasts following the latest results.
Intriguingly,the analysts have cut their price target 11% to US$8.07 showing a clear decline in sentiment around Hertz Global Holdings' valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Hertz Global Holdings analyst has a price target of US$38.00 per share, while the most pessimistic values it at US$2.00. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. As a result it might not be a great idea to make decisions based on the consensus price target, which is after all just an average of this wide range of estimates.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that sales are expected to reverse, with the forecast 33% revenue decline a notable change from historical growth of 0.2% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 8.3% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Hertz Global Holdings is expected to lag the wider industry.
The Bottom Line
The clear low-light was that the analysts cut their forecast revenue estimates for Hertz Global Holdings next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.
We have estimates for Hertz Global Holdings from its six analysts out to 2022, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 5 warning signs for Hertz Global Holdings you should be aware of, and 1 of them is a bit unpleasant.
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