Hertz Global Holdings, Inc.: Still gas in the tank

Research evidence excerpt

Hertz Global Holdings, Inc.: Still gas in the tank

Deutsche Bank

Research

Europe Company Date

Global 14 May 2026

North America Hertz Global

High Yield Corporates Holdings, Inc.

Industrials & Manufacturing

Still gas in the tank

Sean-M Wondrack

Review of 1Q26... Research Analyst

Hertz reported revenue and adj EBITDA ahead of expectations in 1Q26. Revenue of +1-212-250-8980

$2.0 billion (+11% YoY) beat consensus estimates for $1.9 billion by 6%. The strong

result and related RPD improvement (best since '22) suggests that management's

commercial strategy is gaining traction. Management prioritized pricing over fleet

growth and preserved pricing power. Adj EBITDA of ($161) million (+50% YoY) was

14% above consensus estimates for ($186) million. Hertz continued to make

ongoing progress on transformational initiatives but also felt the impact of lingering

recall initiatives, which forced Hertz to carry more fleet than is optimal in the Q1

period and contributed a > $25 million headwind to adj EBITDA in the period.

Cash and equivalents were $583 million and 1L, 2L and total debt amounted to $4.5

billion, $5.1 billion and $6.2 billion, respectively. We are currently creating the 1L,

2L and total structure (incorporating all remaining FCF between Q2-2026 and YE-

2027) at 4.9x, 5.9x and 6.8x, respectively, off our 2027e for $638 million of adj

EBITDA. Using consensus estimates for $794 million of adj EBITDA in 2028, we

create 1L, 2L and total debt at 3.9x, 4.7x and 5.5x, respectively, for a business we Source: Deutsche Bank

estimate has historically been valued ~7.0-8.0x. We see the beginning of a slow but

consistent earnings recovery in the Hertz structure and the company is likely to

benefit from several 1x events in '26 including America's 250th and the World Cup.