Hertz, Avis Stocks Drop After Credit Suisse Downgrades

By Tomi Kilgore Markets MarketWatch Pulse

Shares of Hertz Global Holdings Inc. dropped 7.2% in active afternoon trade Friday, after Credit Suisse turned bearish on the car rental company, citing a lackluster growth environment that is exacerbated by operational struggles. Analyst Anjaneya Singh downgraded the stock to underperform from neutral, and slashed the stock price target to $15, which is 25% below current levels, from $27. "In an environment that presents weak volume growth, flattish pricing and inflationary fleet costs, we see [Hertz] struggling to generate profit growth reflected in consensus estimates," Singh wrote in a note to clients. Avis Budget Group Inc.'s stock slumped 5%, after Singh downgraded the stock to neutral from outperform, citing Avis's the surprise negative volume growth Avis reported for the fourth quarter. Hertz's stock has tumbled 41% over the past 12 months, while Avis shares rallied 15% and the S&P 500 climbed 22%.

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