Hertz stock price target raised to $6 by Susquehanna on solid progress

Hertz Global (HTZ) saw Susquehanna raise its price target to $6.00 while maintaining a Neutral rating, citing progress in daily profit per unit (DPU) metrics, following a 63% year-to-date stock surge. The company reported better-than-expected Q2 2025 results, with adjusted EBITDA of approximately $1 million and an EPS of -$0.34, surpassing analyst estimates. However, significant operational challenges persist, including $18.9 billion in debt, negative free cash flow, and persistent pricing pressures, leading Goldman Sachs to reiterate its $3.00 Sell rating due to an unchanged long-term outlook despite the earnings beat.

Analysis

Hertz Global (HTZ) presents a conflicting investment profile, marked by a significant stock rally against a backdrop of severe fundamental weaknesses. The company's stock has surged 63% year-to-date, and it reported a better-than-expected second quarter for 2025, with adjusted EBITDA of approximately $1 million, decisively beating consensus estimates of a $19 million loss. This outperformance, driven by international operations, led to an EPS of -$0.34, which was ahead of the -$0.40 forecast. Consequently, Susquehanna raised its price target to $6.00, citing progress in daily profit per unit (DPU), but maintained a Neutral rating, signaling underlying caution. This caution is warranted by significant operational headwinds, including a substantial debt burden of $18.9 billion, negative free cash flow, and a consistent year-over-year decline in revenue per day for eight of the last nine quarters. Underscoring these concerns, Goldman Sachs reiterated its Sell rating with a $3.00 price target, arguing that the long-term outlook remains unchanged despite the slight quarterly beat. The uncertainty is further compounded by doubts over whether a new revenue management system can meaningfully improve revenue per unit before the first half of 2026.

Key Decisions for Investors

• Investors should exercise caution, as the 63% year-to-date stock rally appears disconnected from the company's precarious fundamentals, including its $18.9 billion debt load and negative free cash flow.
• Prioritize analysis of core operational metrics such as revenue per day (RPD) and daily profit per unit (DPU) over the marginal Q2 earnings beat, as sustained improvement in these areas is critical for any long-term recovery.
• Consider the stark divergence in analyst ratings, with Goldman Sachs's $3.00 Sell target highlighting significant downside risk, suggesting that the current market price near $6.00 may not fully reflect the company's operational and financial challenges.