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What's in the Cards for Hertz Global (HTZ) in Q4 Earnings?

Zacks Equity Research logoZacks Equity Research 2/19/2019 Zacks Equity Research

Hertz Global Holdings, Inc HTZ is scheduled to report fourth-quarter 2018 earnings numbers on Feb 25.

In the last reported quarter, the company delivered a positive surprise of 20.2%. Additionally, it beat on revenues. Moreover, both the metrics improved on a year-over-year basis. Strength across a majority of the segments drove such encouraging results.

However, things don’t look up for the company this reporting cycle.

Let’s delve into the details further:

With the company investing significantly in its turnaround plan, the bottom line is being stressed and the fourth quarter is likely to be no different on this front. Additionally, pricing pressure as a result of low used car prices might affect the company’s overall results.

However, a strong performance of the U.S. Rental Car segment is anticipated to lift results in the quarter under review. Notably, an efficient fleet management is driving growth at this key segment. The Zacks Consensus Estimate for fourth-quarter revenues at the U.S. Rental Car segment is pegged at $1,539 million, higher than $1,437 million reported in the year-ago quarter.

The International Rental Car segment is also expected to witness substantial growth this soon-to-be-reported quarter. The consensus mark for quarterly revenues in the segment stands at $495 million, above the reported figure of $487 million in the fourth quarter of 2017. The higher revenues are anticipated to boost the top line.

Hertz Global Holdings, Inc Price and EPS Surprise

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Hertz Global Holdings, Inc Price and EPS Surprise | Hertz Global Holdings, Inc Quote

Earnings Whispers

Per our proven model, a company needs to have the right combination of the following two key ingredients — a positive Earnings ESP and a favorable Zacks Rank #3 (Hold) or better — to increase the odds of an earnings surprise. However, that is not the case here as highlighted below.

Earnings ESP: Hertz Global has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at a loss of 82 cents per share. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Hertz Global carries a Zacks Rank #2 (Buy), which increases the predictive power of ESP. However, the company’s 0.00% ESP makes surprise prediction difficult.

We caution against all Sell-rated stocks (#4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks to Consider

Investors interested in the broader Transportation sector may consider stocks like  Azul SA AZUL, Frontline Ltd. FRO and Gol Linhas Aereas Inteligentes S.A. GOL as these possess the perfect mix of elements to beat on earnings in the next releases.

Azul has an Earnings ESP of +8.16% and flaunts a Zacks Rank #1 (Strong Buy). The company will report fourth-quarter earnings numbers on Mar 14. You can see the complete list of today’s Zacks #1 Rank stocks here.

Frontline has an Earnings ESP of +4.17% and is a #1 Ranked player. The company is scheduled to announce fourth-quarter financial figures on Feb 28.

Gol Linhas has an Earnings ESP of +17.07% and a Zacks Rank of 3. This company is set to release fourth-quarter results on Feb 28.

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