Assessing Herc Holdings’ Valuation After $1.2 Billion Debt Refinancing and Leadership Changes

Simply Wall St.12-07

Herc Holdings (HRI) just priced $1.2 billion in new senior unsecured notes to refinance its 5.50% notes due 2027, a move that tightened up its debt timeline and gave investors clearer visibility on ...

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Short term share price momentum has improved even as the year to date share price...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"IE00B66KJ199.SGD":"LEGG MASON ROYCE US SMALL CAP OPPORTUNITY  \" A\" (SGD) ACC","BK4104":"贸易公司与经销商","IE0031619046.USD":"LEGG MASON ROYCE US SMALL CAP OPPORTUNITY \"A\" (USD) INC","HRI":"Herc Holdings Inc.","IE00B7SZL793.SGD":"Legg Mason Royce - US Small Cap Opportunity A Acc SGD-H","IE00B19Z4B17.USD":"LEGG MASON ROYCE US SMALL CAP OPPORTUNITY \"A\" (USD) ACC"},"translate_title":"评估Herc Holdings在12亿美元债务再融资和领导层变动后的估值","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"HRI":1.5},"content_text":"Herc Holdings (HRI) just priced $1.2 billion in new senior unsecured notes to refinance its 5.50% notes due 2027, a move that tightened up its debt timeline and gave investors clearer visibility on future interest costs. See our latest analysis for Herc Holdings. The refinancing announcement, coming on the heels of leadership changes and a fresh quarterly dividend, has helped the stock find its footing recently. Short term share price momentum has improved even as the year to date share price return and 1 year total shareholder return remain deeply negative compared with the strong 5 year total shareholder return. If you are weighing where else to put capital to work in industrial names, it could be worth exploring aerospace and defense stocks as another pocket of potential opportunities. With the stock still trading at a double digit discount to analyst targets and a much steeper implied discount to intrinsic value, is Herc quietly setting up a mispriced recovery, or has the market already captured its next leg of growth? AdvertisementMost Popular Narrative: 15.5% Undervalued Compared with Herc Holdings last close of $141.29, the most widely followed narrative points to a higher fair value anchored in stronger medium term fundamentals.  The combined company's focus on cross selling specialty equipment and comprehensive fleet offerings positions it to benefit from the ongoing industry shift from ownership to rental, increasing rental penetration rates and expanding both average revenue per customer and margins as the specialty mix rises. Integration of H&E expands Herc's branch footprint and salesforce capabilities across strategic, high growth regions, enhancing market share, supporting organic top line growth, and improving operating leverage, all of which should drive earnings expansion post integration.  Read the complete narrative. Curious how this rental super cycle, rising margins and a reset earnings multiple add up to that higher value line? The underlying growth math might surprise you. Result: Fair Value of $167.20 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, that upside case still hinges on successful H&E integration and steady construction demand; any stumble here could quickly challenge the recovery narrative. Find out about the key risks to this Herc Holdings narrative.  Build Your Own Herc Holdings Narrative If you see the story differently or want to dig into the numbers yourself, you can build a personalized view in just minutes: Do it your way. A great starting point for your Herc Holdings research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision. Ready for more targeted opportunities? Before you move on, lock in a few fresh ideas with the Simply Wall Street Screener so you do not miss your next standout position.  Capitalize on potential mispricings by scanning these 906 undervalued stocks based on cash flows that pair strong cash flows with compelling entry points. Ride powerful innovation trends by zeroing in on these 26 AI penny stocks positioned to benefit from real world AI adoption. Strengthen your passive income strategy by targeting these 15 dividend stocks with yields > 3% that may offer reliable, above average yields.   This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.Valuation is complex, but we're here to simplify it.Discover if Herc Holdings might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.Access Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. 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