Hertz’s Price Target Slashed to $3.50 with EBITDA Cuts, Raises $350M PIK Notes
HTZ•Hertz’s price target was cut by Morgan Stanley to $3.50 from $5, accompanied by a 40% and 17% reduction in 2026 and 2027 EBITDA forecasts due to rising vehicle depreciation costs. The company raised $350M through 6.75% exchangeable secured PIK notes due 2030, driving shares to a low of $2.14.
1. Morgan Stanley Cuts Price Target and EBITDA Forecasts
Morgan Stanley lowered Hertz’s price target from $5 to $3.50 while keeping an Equal Weight rating. The bank reduced adjusted EBITDA forecasts by 40% for fiscal 2026 and 17% for 2027, citing elevated vehicle depreciation expenses as the primary driver.
2. $350M Exchangeable PIK Notes Issuance
Hertz completed a $350 million offering of 6.75% exchangeable senior secured PIK notes due 2030, with an option for purchasers to buy an additional $50 million within 13 days. The issuance is designed to strengthen liquidity and defer cash interest payments until maturity or note exchange.
3. Stock Reaction and Retail Sentiment
Shares of Hertz tumbled to a 52-week low of $2.14, extending a year-to-date decline of over 58%. Retail investor sentiment remained extremely bullish with record message volumes even as the stock trades near its lowest level in over a year.
