JP Morgan Comments On Hertz Global Holdings Following Management Meeting; Raise PT To $19

JP Morgan recently met Hertz's HTZ CEO and CFO with a group of investors. Overall, it heard incrementally more bullish comments on demand at HERC and rent-a-car (RAC), strengthened residuals, and a confident update on strategic initiatives around top-line growth and margin expansion. JP Morgan raises 2012 EPS by $0.10 to $1.25 and leaves 2011 unchanged despite the Q1 trim to reflect recent pre-announcement. 2013 remains unchanged at 1.60. JPM nudges up its Dec 2011 price target from $16 to $19 and see the potential for a mid-$20s stock over two years, and would add on dips on this wellmanaged company that has now-desirable late-cycle exposure. In addition to ongoing strength in industrial end markets, management confirmed that non-res activity was perking up, and overall volumes were noted to be somewhat better than expected. HERC revenues were guided to grow +11-12% y/y in 1Q:11 in the pre-announcement, but HERC volume trending in the last week seems to have been particularly encouraging, although this is obviously just a single week's data point. HTZ is trading higher at $16.15