Hertz Global Holdings Inc. HTZ is scheduled to release third-quarter 2017 results on Nov 9. Last quarter, the company delivered loss per share of 63 cents, much wider than the Zacks Consensus Estimate of a loss of 12 cents.
In fact, Hertz has missed our estimates in each of the trailing four quarters, with an average negative surprise of 140.3%. Let’s see how things are shaping up prior to this announcement.
What to Expect?
The question lingering in investors’ minds now is whether Hertz will be able to post positive earnings surprise in the quarter to be reported. The Zacks Consensus Estimate for the quarter under review is $1.44 per share, reflecting a decline of 9% from the year-ago quarter. We note that the Zacks Consensus Estimate for the third quarter has been surging in the last 30 days. Analysts polled by Zacks expect revenues of $2.58 billion, up 1.5% from the year-ago quarter.
Hertz Global Holdings, Inc Price and EPS Surprise
Hertz Global Holdings, Inc Price and EPS Surprise | Hertz Global Holdings, Inc Quote
Furthermore, we note that the stock has outperformed the broader industry in the last three months. The company’s shares have surged 59.1%, while the industry declined 7.1%.
Factors at Play
In second-quarter 2017, Hertz’ results were hurt by weak sales owing to soft domestic revenues, higher fleet costs along with increased spending on systems and brand developments.
While Hertz’ performance remained disappointing in the last quarter, the company remains on track with the execution of its turnaround plan. Further, management remains optimistic about preliminary third-quarter total revenue per day trends in the U.S. rental car segment. Additionally, the company remains encouraged about its International RAC bookings that comprises inbound United States and Asia, in spite of the terror events in early June.
Nonetheless, structural issues with the car rental model remain a concern. Though the Hurricanes Harvey ad Irma has provided a boost to short-term pricing, but this is not going to aid the company’s shares and financials. Furthermore, it is troubled with low used car prices and competition from ride-sharing services like Uber. These factors make us cautious about the upcoming results.
What the Zacks Model Unveils?
Our proven model does not conclusively show that Hertz is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Hertz has an Earnings ESP of -8.17% as the Most Accurate Estimate of $1.32 per share is pegged lower than the Zacks Consensus Estimate of $1.44 per share. While the company’s Zacks Rank #2 increases the predictive power of ESP, we need to have a positive ESP to be confident about an earnings surprise.
Stocks Poised to Beat Earnings Estimates
Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:
Avis Budget Group Inc. CAR currently has an Earnings ESP of +1.43% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Core-Mark Holding Company, Inc. CORE currently has an Earnings ESP of +5.62% and a Zacks Rank #2.
Energizer Holdings, Inc. ENR has an Earnings ESP of +0.35% and a Zacks Rank #2.
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