Hertz's stock ends at fresh low after being caught in downdraft created by car-rental rival Avis

By Ciara Linnane

The broader market selloff is also weighing on car-rental company's stock

Hertz Global Holdings Inc.'s stock ended at a record low Tuesday, off nearly 13% and pulled down by bad news from the rental-car company's smaller rival, Avis Budget Group Inc.

Hertz's stock (HTZ) closed at $7.58, down 12.7% and at its lowest level since it emerged from bankruptcy in 2021, according to Dow Jones Market Data. The stock also notched its largest one-day percentage decline since May 9, 2022, when it fell 13.1%.

The stock has fallen for four of the past five days and is down 27% in the year to date. Last week, the car-rental company posted weaker-than-expected fourth-quarter earnings as it booked $245 million in charges relating to plans to reduce the size of its electric-vehicle fleet, a move it had announced in January.

The company said last month that it planned to sell about 20,000 electric vehicles from its fleet, or about one-third of the total, in another sign that the EV revolution is stalling amid weak demand from consumers.

The company's loss was bigger than expected, although revenue was a whisker ahead of consensus.

See now: Hertz's stock gets downgraded, and Tesla has a lot to do with it

Avis (CAR) on Tuesday was headed for its worst day in four years, after it said it sold a record number of vehicles during the fourth quarter, in a bad market for used cars, due to vehicle oversupply and a spike in interest costs.

Avis was still ahead of consensus, even amid a surprise decline in revenue. But the stock fell more than 23% as the overall market tanked following a surprisingly hot inflation reading for January.

See now: January CPI report: Inflation comes in hotter than expected

Hertz executives spent the company's earnings call with analysts trying to talk up a return to profitability and underscore their commitment to getting back on track. Hertz is also planning to create profitable incremental revenue streams and will grow ride-share and improve its European and value-brand businesses, Scherr said.

-Ciara Linnane

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02-14-24 0643ET

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