Herc (NYSE:HRI) Stock Falls 5% - Should You Sell?

Key Points

• Herc shares fell 5% to about $127.17 in thin trading, significantly below their 50-day moving average of $152.37.
• Despite the decline, analysts remain bullish: Herc has a consensus “Moderate Buy” rating and an average price target of $184.43, with several firms recently raising targets.
• The company beat quarterly earnings and revenue expectations, but carries high leverage with a debt-to-equity ratio of 4.22 and a dividend payout ratio above 190%, signaling potential financial risks.

Shares of Herc Holdings Inc. (NYSE:HRI - Get Free Report) traded down 5% during trading on Tuesday. The stock traded as low as $126.46 and last traded at $127.17. 128,116 shares were traded during mid-day trading, a decline of 79% from the average session volume of 601,603 shares. The stock had previously closed at $133.90.

Wall Street Analyst Weigh In

Several analysts recently issued reports on HRI shares. Zacks Research upgraded shares of Herc from a "hold" rating to a "strong-buy" rating in a research report on Monday, September 14th. JPMorgan Chase & Co. raised Herc from a "neutral" rating to an "overweight" rating and raised their target price for the company from $165.00 to $175.00 in a report on Thursday, September 10th. KeyCorp lifted their price target on Herc from $165.00 to $185.00 and gave the company an "overweight" rating in a research note on Wednesday, July 29th. Weiss Ratings raised Herc from a "sell (d+)" rating to a "hold (c)" rating in a report on Tuesday, July 28th. Finally, Citigroup upped their price objective on Herc from $155.00 to $175.00 and gave the stock a "buy" rating in a research report on Tuesday, July 14th. One analyst has rated the stock with a Strong Buy rating, six have assigned a Buy rating and two have given a Hold rating to the company's stock. According to MarketBeat, Herc has a consensus rating of "Moderate Buy" and a consensus target price of $184.43.

Herc Stock Performance

The company has a debt-to-equity ratio of 4.22, a quick ratio of 1.10 and a current ratio of 1.10. The firm has a market cap of $4.24 billion, a P/E ratio of 86.48 and a beta of 1.86. The company's 50 day moving average is $152.37 and its 200 day moving average is $136.05.

Herc (NYSE:HRI - Get Free Report) last posted its earnings results on Tuesday, July 28th. The transportation company reported $1.43 earnings per share for the quarter, topping analysts' consensus estimates of $0.76 by $0.67. Herc had a net margin of 1.01% and a return on equity of 10.33%. The firm had revenue of $1.20 billion for the quarter, compared to analysts' expectations of $1.16 billion. During the same quarter in the previous year, the firm posted $1.87 earnings per share. The company's revenue was up 20.2% on a year-over-year basis. As a group, equities analysts predict that Herc Holdings Inc. will post 6.97 earnings per share for the current fiscal year.

Herc Dividend Announcement

The company also recently announced a quarterly dividend, which was paid on Wednesday, September 16th. Shareholders of record on Wednesday, September 2nd were issued a $0.70 dividend. This represents a $2.80 dividend on an annualized basis and a yield of 2.2%. The ex-dividend date of this dividend was Wednesday, September 2nd. Herc's dividend payout ratio is presently 190.48%.

Hedge Funds Weigh In On Herc

Several large investors have recently bought and sold shares of the company. State of Wyoming boosted its holdings in shares of Herc by 21.0% during the first quarter. State of Wyoming now owns 616 shares of the transportation company's stock worth $61,000 after purchasing an additional 107 shares during the period. Hantz Financial Services Inc. grew its stake in shares of Herc by 342.1% in the fourth quarter. Hantz Financial Services Inc. now owns 168 shares of the transportation company's stock worth $25,000 after purchasing an additional 130 shares during the last quarter. HighTower Advisors LLC increased its holdings in Herc by 4.1% during the 2nd quarter. HighTower Advisors LLC now owns 3,386 shares of the transportation company's stock valued at $485,000 after purchasing an additional 134 shares during the period. Swiss National Bank raised its position in Herc by 0.3% during the 1st quarter. Swiss National Bank now owns 62,557 shares of the transportation company's stock valued at $6,228,000 after purchasing an additional 200 shares during the last quarter. Finally, NewEdge Advisors LLC raised its position in Herc by 61.4% during the 1st quarter. NewEdge Advisors LLC now owns 694 shares of the transportation company's stock valued at $69,000 after purchasing an additional 264 shares during the last quarter. 93.11% of the stock is currently owned by institutional investors.

About Herc

Herc Holdings Inc, operating under the Herc Rentals brand, is an equipment rental supplier serving construction, industrial, government, commercial, and other customers. The company provides short- and long-term rentals of equipment used for construction, maintenance, infrastructure, remediation, and event-related projects.

Its rental fleet includes aerial work platforms, earthmoving equipment, material-handling equipment, trucks and trailers, power-generation and climate-control systems, pumps, trench-safety equipment, tools, and general construction equipment.

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