Reuters: Global Markets: Hertz stock could rise 70 percent in two years: Barron's

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Hertz stock could rise 70 percent in two years: Barron's May 26th 2013, 23:38 Tweet Share this Email Print A Hertz sign is seen outside a rental car office in Ferndale, Michigan May 9, 2011. Credit: Reuters/Rebecca Cook Sun May 26, 2013 7:38pm EDT (Reuters) - Car rental company Hertz Global Holdings Inc (HTZ.N) is poised for a long run of earnings and revenue growth and the stock could be worth 70 percent more in two years, the Barron's financial news weekly said in its May 27 edition. The car rental industry, tied closely to airline traffic and hotel bookings, is seeing strong volumes, helped by a recovery in business travel in the United States. Hertz, which primarily serves corporate customers, is also benefiting from the acquisition of Dollar Thrifty, a big player in the leisure and lower-priced rental market. Hertz, No. 2 in the car rental market behind privately held Enterprise, will gain from domestic travel which is expected to hit a record high this year, Barron's said. "Consolidation should bring firmer pricing to the industry and a recent acquisition should allow Hertz to pursue new growth opportunities across more brands," Barron's said. In the past decade, the number of major car rental companies has dropped from six to three. In the first quarter, Hertz brand rental rates at airports rose 5.3 percent, Barron's said. Park Ridge, New Jersey-based Hertz forecasts that revenue, which rose 8.7 percent last year to $9.02 billion, will climb as much as 13.5 percent annually through 2015, and that earnings will come in at $3.10 to $3.30 a share. Apply last week's multiple of 13 times current earnings to that forecast, and the stock is worth $43, Barron's says. Hertz shares, up about 50 percent this year, closed at $25.20 on Friday. Hertz does face the challenge of replacing and disposing of cars, and no one is quite sure how Japan's newly cheap yen will affect the prices of new and used vehicles, Barron's said. (Reporting by Ellen Freilich in New York) Tweet this Link this Share this Digg this Email Reprints Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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